Natural Gas Essay

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Primary activities: Supply of natural gas: NiSource is one of the biggest natural gas distribution companies in the USA. Company is not responsible for the production of natural gas, but rather purchases fossil fuel at the source and transmits supply thru its pipelines to industries and local costumers. Natural gas can be transported to distribution facilities in two ways: underground gas pipelines or shipped by the sea in LNG tankers. In nature during the extraction, natural gas exists as a gas, which needs to be captured by special pipeline system designed for gathering processes. Captured gas contains water and other impurities that have to be removed in production well. In order to be transported, it needs to be cooled and transformed into liquid, which increases transportation efficiency to processing units and improves transportation cost ratio. Regasification is the process when "wet", liquid natural gas is processed and changed to pipeline quality natural gas. Natural gas needs to be turned back to gas in order to be useful for residential and commercial customers. This process needs to be monitored and measured for quality and content of natural gas due to the risk of pipeline rupture and safety. "Natural gas entering the system that is not within certain specific gravities, pressures, Btu content range, or water content level will cause operational problems, pipeline deterioration, or even cause pipeline rupture."1 Natural gas transported to distributors is called "dry" gas due to the physical state. Transportation: NiSource is responsible for transportation of natural gas to the storage facility and distribution to end customers. In order for efficient transportation of natural gas, company use wide diameter pipeline c... ... middle of paper ... ...ns and material necessary that need to be consumed during the business processes. The biggest part of this activity is contract and orders related to natural gas supply, purchase and modernization of pipelines, and machinery required for maintain good condition of pipelines. Company needs to predict when and what amount of natural gas needs to be transferred to meet consumer demand. Another important task of procurement is purchase of compressors required for steady flow of natural gas to end customers and the maintenance equipment required to ensure high efficiency and dependable. It is required for the company to properly plan all supply orders to lower variable costs and increase profits. Each activity level requires supply of specific materials unique for the processes and operations, which shows that procurement is present in every single stage of value chain.

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