Companies in this industry operate natural gas distribution systems that serve customer locations, broker the sale of gas to distributors, and buy natural gas and directly distribute it to customers. Major companies include Sempra Energy, CenterPoint Energy, and NiSource (all based in the US); Gas Natural (Spain); GasTerra (the Netherlands); Gazprom (Russia); Centrica (the UK); and Engie (France); as well as the natural gas distribution subsidiaries of US companies such as Dominion Energy and Duke Energy.
Demand for natural gas is driven by energy use, which in turn is influenced by overall economic activity. The profitability of natural gas distributors depends largely on the efficiency of their operations, because prices typically are fixed by public utility commissions (PUCs). Companies that operate multiple distribution networks may enjoy economies of scale in purchasing. Small companies can compete effectively through a strong regional presence. The US industry is highly concentrated: the 50 largest companies account for about 90% of revenue.
Products, Operations & Technology
Distribution of natural gas directly to consumers accounts for about 60% of industry revenue; wholesale distribution and marketing accounts for about 35%.