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Natural Gas Transmission & Distribution

Benefits & Uses of Natural Gas

  • Significantly lower emissions than other fuel
  • Readily abundant in supply basins in the U.S. and Canada
  • Interstate pipeline system safest transportation system in the country
  • Used for cooking, water heating, home heating and cooling, gas-fired dryers, fireplaces, and grills; also provides electricity and has industrial applications

Production & Delivery  

We deliver natural gas to two million customers in five states. We purchase natural gas from producers, marketers, and brokers. We contract with pipeline companies to transport the natural gas to our distribution system where we deliver it to our customers.

In general, the natural gas industry includes:

  • Production and gathering companies
  • Marketing companies and brokers
  • Transmission pipeline companies
  • Local distribution companies, or LDCs (Xcel Energy is an LDC)

We purchase our natural gas supply from producers and marketers, and contract with transmission pipeline companies for capacity to move the natural gas to our distribution facilities. The market sets the price for the natural gas supply; the Federal Energy Regulatory Commission or state regulatory commissions set the price for its transportation.

We pass through the costs of purchasing and transmission of the natural gas to customers with no markup or profit.

  • Save money by switching to natural gas (Residential | Business)
  • Learn how to recognize a natural gas leak on our Natural Gas Safety page

*Please note: Information for this page was supplied in part by the American Gas Association (external link).


The natural gas that we purchase comes primarily from four gas supply basins:

  1. Rocky Mountain Basin, located in Colorado, Montana and Wyoming
  2. Anadarko Arkoma Basin, located in the mid-continent states of Texas, Oklahoma, and Kansas
  3. Western Canada Sedimentary Basin, located in Alberta and Saskatchewan, Canada
  4. Permian Basin in Texas and New Mexico


At production fields, natural pressure brings natural gas to the top of a well, where it goes into gathering lines. Gathering lines deliver natural gas to a processing plant where impurities, such as water or carbon dioxide, are removed. Once the natural gas meets the pipeline quality standards, it is ready to go into the interstate transmission pipeline system.

Marketers work with the producers to sell and transport some of the natural gas to end users, such as large industrial companies, electric generating facilities, and energy providers such as Xcel Energy.


Natural gas is transported through a transmission pipeline system, which is composed of large steel pipe ranging from 20 inches to 42 inches in diameter. The pressure ranges from 200 pounds to 1,500 pounds per square inch.

Most major pipelines are looped, which means two or more lines run parallel to each other in the same right of way.

Compressor stations are located every 50 to 60 miles along each pipeline. A compressor is an internal combustion engine or turbine that creates pressure to push the natural gas through the lines.

Along the pipeline route, depleted oil and gas wells, salt caverns, and other natural geological formations are used to store natural gas for use during times of peak demand.

When the natural gas reaches a local natural gas utility – such as Xcel Energy – it passes through a gate station, where its pressure is reduced to a range between 100 pounds and as low as ¼ pound. An odorant is added, and the volumes of gas are measured.


After passing through the a gate station natural gas is then moved into distribution lines, or mains, that range from 2 inches to 24 inches in diameter. In general, the closer natural gas gets to the customer, the smaller the pipe and the lower the pressure. When the natural gas reaches a typical home, its service line is 1 inch or less in diameter and its pressure is between 60 pounds and ¼ pound.


In addition to storage facilities along the pipeline route, which are owned by the transmission pipeline companies, we also own and operate several underground storage fields. Additionally, we own peaking plants where natural gas or propane is stored in liquid form. These storage facilities enable us to meet customer needs on the coldest days when demand is highest.

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Energy Saving Tip

Turn off your lights when you leave the room—even if you'll only be gone for a moment. Contemporary light bulbs require very little energy to turn "on."

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Break Ground, Not the Law

Always call 811 before digging in your yard to avoid hitting buried gas or electric lines. Not only is it the safe thing to do, but it's the law.