Who Operates Pipelines?

The network of oil and natural gas pipelines that serve the U.S. is not owned by a single entity.

A large and growing group of pipeline systems are owned and operated by companies who are only pipeline operators and who are not involved in other aspects of the oil industry. Many of these companies operate as publicly traded Master Limited Partnerships and stock corporations owned by millions of Americans invested in Individual Retirement Accounts, 401(k) accounts, pension funds, and individual investments.

There are also those companies, like a power plant or a chemical plant, which may operate a small pipeline system to bring fuel to the plant or to move feedstock from one plant to another.

Natural gas pipelines range from large, regional companies to small, municipal gas systems and everything in between.

Pipeline companies do not usually own the products they are transporting. Pipeline companies are simply transportation service intermediaries that move the product from the producers and shippers to the marketplace.

Producers and shippers, those which actually own the product, pay pipeline companies to transport their product from oil fields to refineries, manufacturers, and distribution centers. In order to move their product, shippers use a nominations process to reserve a specific amount of space per month on the pipeline to transport their products.

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