Natural gas procurement managers, operations leaders, and financial decision-makers face a critical question: How do I manage cost volatility while ensuring a reliable natural gas supply?
With winter approaching, natural gas pipelines in the US Midwest are under pressure. Pipelines like Great Lakes, Viking, NGPL, Northern Border, and Northern Natural Gas form the backbone of energy delivery - but maintenance, capacity limits, and shifting supply dynamics can create unexpected risks.
This blog will help you:
- Understand the infrastructure challenges shaping Midwest natural gas markets.
- Learn how these pipelines impact pricing and reliability.
- Discover actionable strategies to protect your business.
Pipeline constraints and market volatility
Natural gas pricing isn't just about market trends; it is about infrastructure. When one pipeline faces restrictions, the domino effect ripples across the network, tightening supply and driving up costs. While natural gas pipelines in the US span thousands of miles, these five Midwest systems are critical for regional reliability. Below, we break down the five major pipelines feeding the Midwest and the important role they play in the security of supply.
Great Lakes Gas Transmission – the northern gateway
Why the pipeline matters
Operated by TC Energy, Great Lakes Gas Transmission is a critical link for Alberta-sourced gas into Minnesota, Wisconsin, and Michigan. It acts as a header system, feeding industrial hubs and storage fields in Michigan.
- Capacity: ~1.7 BCF/day from Emerson, Manitoba.
- Markets served: Minnesota (taconite mining), Wisconsin, Michigan (Detroit area, storage fields).
- Cost advantage: At ~$0.27/MMBtu, it's one of the cheapest delivery options.
Current pipeline challenges
- Maintenance & allocations: Summer projects near Emerson and Iron River caused daily scheduling headaches.
- Impact: Allocations forced reselling unused capacity at discounts, increasing costs.
- Why it matters for winter: Full capacity flows mean any disruption can spike basis prices quickly.
Viking Gas Transmission – small but strategic
Why the pipeline matters
Owned by DT Midstream, Viking is smaller (about one-third the size of Great Lakes) but essential for the Minnesota and Wisconsin supply. It interconnects with Northern Natural Gas and CenterPoint Energy, making it a key feeder.
- Capacity: Moves gas from Emerson to A&R Marshfield.
- Cost: Similar to Great Lakes (~$0.27/MMBtu).
Current challenges
- Ownership transition: New operator means evolving practices.
- Maintenance disruptions: Hydraulic testing shuts down flows, forcing resourcing from higher-priced pipelines.
- Impact: Customers experience cost disadvantages when Emerson's supply is unavailable.
Natural Gas Pipeline (NGPL) – the southern supply chain
Why the pipeline matters
Operated by Kinder Morgan, NGPL connects the Gulf Coast and Permian Basin gas to Midwest markets. It's a major artery for Chicago LDCs and power plants.
- Capacity: ~8.9 BCF system-wide; 5.2 BCF in market area.
- Markets served: Chicago, Iowa, power generation, and LNG export flows.
- Cost: Competitive at ~$0.23/MMBtu from Amarillo to Chicago.
Current challenges
- Flow reversal: LNG exports have shifted summer flows southward, reducing northbound availability.
- Maintenance: Western segment projects required proactive scheduling.
- Positive note: NGPL's transparent allocation process allows better planning compared to other pipelines.
Northern Border Pipeline – Bakken's dominance
Why the pipeline matters
Another TC Energy pipeline, Northern Border, historically moved Canadian gas but now carries ~85% Bakken supply. It's vital for the Ventura and Chicago markets.
- Capacity: ~2.5 BCF/day.
- Cost: ~$0.33/MMBtu.
- Markets served: Midwest LDCs, Northern Natural Gas interconnects at Ventura and Wellcome.
Current challenges
- Expansion projects:
- Bison Express: Adds 300,000 Dth/day westward to Cheyenne Hub, creating optionality that could divert supply from the Midwest.
- Ventura Express: Moves gas east-to-west to Ventura, responding to high basis prices.
- Impact: Optionality means Midwest buyers must monitor price signals closely.
Northern Natural Gas – the backbone of Midwest supply
Why the pipeline matters
Operated by Berkshire Hathaway, Northern Natural Gas is the largest and most expensive pipeline in the region. It serves major LDCs like CenterPoint and Xcel Energy, plus Iowa and Wisconsin utilities.
- Cost: ~$0.54/MMBtu—double Great Lakes rates.
- Markets served: Twin Cities, Iowa, Nebraska, and Wisconsin.
Current challenges
- Capacity vs. demand: Northern has contracted for more MDQ than upstream pipelines can deliver, creating winter scarcity.
- Impact: Basis spikes during peak days as buyers compete for limited molecules.
- Maintenance: Compressor upgrades and ongoing projects have constrained flows, even in summer.
- Future outlook: Northern Lights 2027 expansion aims to increase Ventura-to-market capacity, but constraints remain until then.
Strategic energy management
Managing natural gas procurement in the Midwest requires a proactive, multi-layered approach. Here's how leading procurement teams can stay ahead:
1. Real-time pipeline intelligence
Pipeline constraints can change daily. Monitoring maintenance schedules, curtailments, and force majeure notices across Great Lakes, Viking, NGPL, Northern Border, and Northern Natural Gas is essential.
Why it matters: Early alerts allow you to adjust nominations before allocations hit, reducing exposure to costly resourcing.
2. Dynamic sourcing strategies
When Emerson-based supply is disrupted, pivoting to alternative interconnects like A&R or Northern Natural Gas can prevent severe cost impacts.
Why it matters: Build relationships with multiple suppliers and secure interruptible capacity for flexibility.
3. Market-based risk management
Basis volatility on Northern Natural Gas can spike during peak days. Hedging strategies, such as fixed-price contracts or basis swaps, help stabilize budgets.
Why it matters: Align hedging with operational realities; a financial hedge without physical flexibility can still leave you exposed.
4. Capacity optimization
Storage is your best friend in the Midwest. Michigan's geology offers vast storage fields, which can be used to inject gas during low-price periods and withdraw during winter peaks.
Why it matters: Secure storage rights early; competition intensifies as winter approaches.
5. Scenario planning
Run stress tests for pipeline outages. Ask: What happens if Northern Border allocates 20%? What if Viking shuts down for a week?
Outcome: A contingency plan ensures you can act fast without scrambling for supply at premium prices.
Real-world example – managing Viking disruptions
This summer, Viking Gas Transmission shut down flows for hydraulic testing, creating a sudden supply gap for Midwest industrial clients. Here's how World Kinect managed the situation:
Step 1: Immediate assessment
Our scheduling team analyzed the outage impact on contracted volumes and identified vulnerable delivery points.
Step 2: Rapid resourcing
We shifted supply from Emerson to Northern Natural Gas and A&R Pipeline. While these alternatives carried higher transport costs, proactive action minimized exposure to spot market volatility.
Step 3: Communication & transparency
Clients received real-time updates on flow status, cost implications, and contingency measures. This transparency allowed procurement managers to adjust budgets and operations without surprises.
Step 4: Post-event analysis
We reviewed the outage duration, cost impact, and scheduling efficiency to refine future response strategies.
Result: Clients avoided severe cost overruns and maintained operational continuity despite a major pipeline disruption.
Actionable takeaways for navigating natural gas pipelines in the US Midwest
- Audit pipeline exposure: Know your dependencies and bottlenecks.
- Secure storage early: Michigan's geology offers robust options.
- Monitor open seasons: Projects like Northern Lights 2027 and Bison Express will reshape flows.
- Diversify supply points: Build flexibility beyond Emerson and Ventura.
- Work with experts: Engage with teams that understand both market and operational realities.
Conclusion
Natural gas procurement in the Midwest isn't just about buying at the right price; it's about navigating a complex web of pipelines, maintenance schedules, and shifting supply dynamics. By understanding these challenges and acting now, you can protect your business from volatility and ensure reliable energy delivery.
Ready to take control of your natural gas strategy?
Natural gas pipelines in the US Midwest FAQs
Q1: How do I manage natural gas cost volatility?
Manage natural gas volatility by using hedging and storage strategies to mitigate seasonal price swings.
Q2: Which pipelines most affect the Midwest natural gas supply?
The Midwest natural gas supply is most impacted by the Great Lakes, Viking, NGPL, Northern Border, and Northern Natural Gas.
Q3: Why do winter natural gas prices spike in the Midwest?
Natural gas prices spike in the Midwest due to peak-day constraints and limited takeaway capacity, creating scarcity.
Q4: How can natural gas pipeline maintenance impact my costs?
Natural gas pipeline maintenance can impact costs as allocations force resourcing from higher-priced markets.
Q5: What's the best way to get the lowest natural gas price?
The lowest natural gas prices can be achieved by securing capacity on low-cost pipelines and planning for contingencies.
