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What Are the Segments of the Natural Gas Industry?

The natural gas industry is divided into three major segments:

  • Production
  • Transmission
  • Distribution

diagram of natural gas industry

The production segment searches for, locates and drills natural gas (sometime in association with oil).  It purifies the gas and collects it through gathering lines which come together to deliver the gas to the next segment – transmission.

The transmission segment transports large quantities of gas to the areas where the gas is consumed.  Transmission may also include storage facilities. 

Gas is then delivered to the distribution segment where gas is delivered from the interstate pipelines to individual customers.  Distribution companies may also have storage and/or peak shaving facilities.

production to distribution

Production Gathering Transmission Distribution
Economic and Siting Regulation
Unregulated or State regulation Unregulated or State regulation Federal Energy Regulatory Agency (FERC) State regulation
Safety Regulation
Unregulated or State regulation Unregulated, State or federal regulation Pipeline and Hazardous Materials Safety Administration Office of Pipeline Safety State regulation


Content last updated May 2021