What it means: Usually very large industrial customers connected directly to an interstate pipeline system. These customers purchase their own gas supplies and contract directly from the pipeline for transportation, thereby bypassing the bundled services typically offered by local distribution companies.
See it in action: What do you do if you want to use natural gas for a large industrial application but you’re miles away from the nearest local distribution company (LDC)? If you’re lucky you can call up one of the pipelines serving the region and buy gas directly from them.
Have a look at our map of the region’s natural gas system to get an idea of where direct connect customers could be located. As you can see LDCs focus on more populous areas, it’s not cost effective to build distribution lines to homes located many miles apart. Industrial users can consume significant amounts of gas so even if they are located far from the nearest LDC it may make financial sense for them to work directly with a pipeline to secure a clean and cost effective way to power their industrial application.
Natural Gas Terms of the Week are posted each Monday, check back weekly to boost your natural gas IQ.
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