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About Us / Our Services

Date Requested: Aug 18 2019 8:28 AM
Printable Version

Northern Natural Gas has firm and interruptible transportation services, storage services, as well as other transportation related services that are available to customers as a reliable and flexible supply source to meet short-and long-term market demands.

Northern's system includes three underground natural gas storage facilities and two liquefied natural gas storage facilities, with a total firm service and operational storage capacity of 79 billion cubic feet.

Northern and its commercial staff is committed to proactively working with our customers to discuss business needs and define solutions. Northern doesn't just deliver natural gas -- we deliver solutions, tools and resources that improve the businesses of our customers.

See the links below to find out more or contact a Northern account representative regarding Northern's transportation and storage services.

Firm Transportation

As a firm shipper you can count on the delivery of gas on Northern's system when you need it. Northern's high level of reliability gives you the confidence you need to serve markets across the country. Contract quantities for firm transportation are generally expressed in terms of maximum daily quantity in decatherms (Dth). This is the volume of gas that Northern is obligated to transport from the point(s) of receipt to the point(s) of delivery. Your firm contract term can be varied as well, from one day to multiple years, depending on your requirements.

Advantages of using firm transportation at maximum tariff rates - all point flexibility, subject to capacity availability, at maximum tariff rates.

Additional advantages of using firm transportation - Northern's pricing desk is available to competitively market Northern's capacity on a daily basis.

Pooling points can be used to simplify the delivery or purchase of gas supplies.

Volume in excess of the total firm maximum daily quantity is transported as interruptible overrun service.

Term can vary, depending on your needs.

Northern will provide marketing services to assist you in marketing your excess capacity.

Interruptible Transportation

Interruptible transportation is designed to give you a flexible alternative to our firm transportation service. This is a commodity-based service determined on the volume that actually flows; therefore, you pay only for the capacity you use. On an interruptible transportation contract, volume is transported, subject to interruption.

One of the advantages of adding interruptible service to your gas portfolio includes using pooling points to simplify the delivery or purchase of gas supplies.

Transportation Related Services

System Management Service (SMS) – This service provides a no-notice transportation service, which may be used in conjunction with firm transportation service. This service has a term that matches your corresponding contract for firm throughput. Even though shippers are expected to flow the volume of gas they nominate to our pipe, we know that occasionally this is not possible. SMS is a valuable tool to effectively manage delivery variances and minimize penalties associated with such variances.

Mid Pooling Service (MPS) – Pooling allows shippers to aggregate supplies to central points for easy and flexible delivery to their markets. Pooling also provides the markets with easy access to gas supplies. By using pooling, smaller gas packages can be brought together at a point to make a larger, more marketable package.

Storage Services

Northern offers several flexible storage options that can play an important role in the successful and efficient operation of your natural gas business. Northern operates three natural gas storage facilities and two liquefied natural gas peaking units. Firm delivery service from these storage facilities is fully contracted and are central to meeting our customers' peak-day system requirements. The storage facilities’ total firm and operational capacity is 79 Bcf, including 4 Bcf of liquefied natural gas. Northern has firm and interruptible storage services that are available as a reliable and flexible customer supply source to meet short-and long-term market demand and arbitrage opportunities.

  • As a producer, you can use these services to maximize production and maximize netbacks. Our strategic mid-continent location on the interstate pipeline grid gives you access to numerous supply basins and markets throughout the country.
  • As a marketer, you can limit financial and physical risk with our injection/withdrawal or withdrawal/injection options. This service will assist you in maximizing your winter deliverability and increase the reliability of your service.
  • As an LDC, you can provide your customers supply reliability and peaking options via Northern's storage service. Storage is a valuable service when supply interruptions or price swings disrupt your portfolio. Storage service also allows you to manage your gas costs by purchasing lower cost supplies during the non-winter months for storage withdrawal during the typically higher cost winter season.

Storage services are offered at these points on Northern's system:

Northern offers storage services at numerous points on its system. A list of current storage points can be found under Support - User Manuals - Storage Information - Deferred Delivery (Storage) Points.

Firm Deferred Delivery Service (FDD)

The annual cycle for this firm storage service is June 1 through April 30. The injection season begins June 1 and ends October 31. The withdrawal season begins November 1 and ends April 30. FDD provides a level of firm withdrawals during the injection season and provides a level of firm injections during the withdrawal season. In addition, as a firm storage customer, you may choose your withdrawal service parameter option, which will be set forth in the contract. The withdrawal service options include 1) Gas-In-Place (GIP); 2) Step Withdrawal Option; 3) 3-Step Withdrawal Option; and 4) EG Withdrawal Option. These service alternatives give you the choice of deliverability options that best fit your needs. Daily deliverability under the GIP option is dependent upon the amount of gas in the storage account and gives you a great deal of flexibility regarding early season withdrawals versus late season withdrawals. The 4-Step and 3-Step options provide for fixed levels of deliverability on a monthly or semi-monthly basis to provide for simplicity of supply planning. The EG Option offers enhanced firm daily injection and withdrawal rights and provides firm daily rights in May. Firm Deferred Delivery (FDD) service is offered in conjunction with transportation service on Northern's system.

FDD gives you the following flexibility:

  • FDD provides firm storage service for supply reliability
  • FDD provides firm scheduling priority in grid time bump cycles.
  • FDD provides real-time injection or withdrawal nominations up to one hour prior to the end of the gas day.
  • FDD provides firm counter-cycle injections and withdrawals.
  • FDD provides for multi-cycling your storage for more flexibility and for a lower FDD unit rate.
  • FDD allows you to provide service to both price sensitive and time sensitive markets.
  • FDD provides you with firm supply or a firm market to offset other marketplace interruptions or accommodate price swings in the marketplace.

Interruptible Deferred Delivery (IDD) & Preferred Deferred Delivery Service (PDD)

Preferred Deferred Delivery (PDD) storage service is available on a year-round basis and is available in many term combinations. PDD service is offered in conjunction with transportation service on Northern's system.

  • PDD has a higher scheduling priority than IDD service.
  • You can tailor your injection and withdrawal parameters to meet your individual service requirements.
  • Terms for PDD are flexible. PDD service is scheduled daily by price, with the highest price receiving highest priority.

PDD can be a multi-month service that allows customers to inject gas one month, and then withdraw gas over one or more subsequent months. PDD is used to take advantage of price arbitrage opportunities, or in conjunction with FDD to meet market demand.

PDD is typically used as follows:

  • For storage opportunities that need higher priority than IDD and the shipper provides a commitment to parameters for service to receive this higher priority.
  • On a seasonal basis with summer injections by month and winter withdrawals by month.
  • On a month-to-month basis to take advantage of monthly price swings.

Interruptible Deferred Delivery (IDD) storage service is available on a year-around basis. IDD service is offered in conjunction with transportation service on Northern's system.

  • Terms for IDD are flexible. IDD service is scheduled daily by price, with the highest price receiving highest priority.
  • IDD is an extremely flexible service to meet your variable supply or market needs.

IDD is typically used as follows:

  • For storage opportunities that do not require a commitment from the Shipper.
  • Within a month to level day-to-day supply or market swing volumes.

The following PDD and IDD service variations are available for your use:

  • Available to withdraw gas first and inject the gas at a later date.
  • Available to inject gas first and withdraw the gas at a later date.
Interruptible Liquefaction and Delivery Service (ILD)

ILD Overview

Interruptible Liquefaction and Delivery Service (ILD) allows customers to offload LNG from Northern’s LNG facility near Garner, Iowa. A party wishing to obtain ILD will first enter into an ILD Base agreement, which will subsequently be amended with an Appendix A when Northern and the ILD customer reach agreement on a transaction including the ILD rate, quantity and term. Subsequently, the transaction is satisfied by the ILD customer scheduling and physically offloading the total quantity of LNG from Northern’s Garner, Iowa facility over the term of the transaction. The LNG that is offloaded by the ILD customer is then due back to Northern’s Garner delivery point in equivalent decatherms of natural gas via a transportation contract on Northern’s pipeline system by the last calendar day of the month following the offloading. Failure to do so may result in a replacement charge to the ILD customer at 150% of Northern’s replacement cost. The ILD customer must offload its total transaction quantity (per Appendix A) by the end of the transaction term or a $2.00 per decatherm penalty may apply to volumes that are not offloaded.

ILD Availability

ILD Rates

  • Northern’s maximum rate for ILD service is $11.75 per decatherm and the minimum rate is $0.5044 per decatherm.
  • Northern’s performance obligation charge is $2.00 per decatherm.

ILD Contracting Process

ILD Contract Summary

  • Base ILD agreement
    • This is a basic agreement between the customer and Northern that is very similar to a standard interruptible transportation agreement. There is no rate or quantity, and no obligation for either party.
  • Appendix A to the base ILD agreement (“transaction”)
    • The transaction will include the ILD rate, term and quantity.
    • ​The ILD customer is now obligated to offload its ILD quantity by the end of the contract term at the contract rate.

ILD Offloading Process

  • The ILD customer will provide Northern at least 24-hours’ notice for all requested ILD deliveries.
  • The ILD customer will complete an initial delivery confirmation form including truck driver information, vehicle identification, etc.
  • The delivery confirmation form will be the ILD customer’s “ticket in the door” once arriving at Northern’s Garner facility. The Northern representative at Garner will also have a copy of the form, and will confirm all details with the driver in order to allow admittance.
  • The ILD customer’s LNG trailer will park on a scale and an initial weight will be recorded.
  • ​The ILD customer will then connect its trailer to Northern’s LNG offloading facility and delivery will begin.
  • ​Once delivery is complete, a final weight will be documented and a conversion to natural gas decatherms will be calculated by Northern for billing purposes
  • A final delivery confirmation form will be sent back to Northern’s contract group and provided to the ILD customer.
  • ILD billing will occur with Northern’s normal monthly commodity invoicing timeline.

ILD Billing

  • A simple example of an ILD transaction and billing is as follows:
    • ​ILD Contract terms:
      • ILD contract quantity: 100,000 decatherms.
      • ILD contract term: Six months.
      • ILD contract rate: $6.00 per decatherm
    • ​​ILD activity by Customer:
      • ILD customer fills a trailer with 826 decatherms (10,000 gallon truck)
      • On the monthly ILD invoice, the date of the ILD delivery will be shown with a quantity offloaded of 826 decatherms multiplied by the ILD contract rate of $6.00 per decatherm, which equals $4,956.00.
      • Every ILD delivery will be shown as a line item on the invoice in the same fashion.
    • ​Performance Obligation:
      • If the ILD customer does not offload the full contract quantity of 100,000 decatherms by the end of the six month contract term, $2.00 per decatherm for the volume that has not been offloaded will be billed on the monthly invoice.
    • ​​Payback:
      • The ILD customer must payback Northern by delivering natural gas on Northern’s pipeline system under a transportation service agreement to the Garner delivery point for all offloaded ILD volumes by the end of the next month.
        • For example, all quantities offloaded during the month of April must be paid back to Northern by the end of the month of May.
        • If all quantities are not paid back by the deadline, the ILD customer will be required to pay Northern for Northern’s cost to replace the ILD quantity at 150% of Northern’s replacement cost.

If you have any additional questions, please contact:

Mike Barry
Business Development
Office Phone: 402.398.7105
Cell Phone: 402.290.3068
mike.barry@nngco.com