Northern Gas Networks

What does the company do?

Northern Gas Networks (NGN) is a gas distribution network operator, delivering gas from the UK’s high pressure gas national transportation system through, at the time of this investment offer, 37,000 kilometres of pipelines to around 2.7 million homes and businesses in the North East, Northern Cumbria and much of Yorkshire. One of 6 networks, each gas distribution network covers a separate geographical region. As a distribution network, NGN does not generate the gas nor sell the gas to the end-customers. Its role is to transport it through the network of underground pipes. On a day to day basis, its role is to keep the energy flowing by investing in improving the energy infrastructure; working with energy suppliers to look after vulnerable end-customers; and fixing gas leaks if they happen.

In 2021, around 97% of end-customers that are directly connected to its network are domestic users, representing about 60% of the total gas demand. The remaining 3% of end-customers are industrial and commercial clients which, given their larger demand per client, comprises the remaining 40% of the total gas demand. The company employs almost 1,400 people (as of 2021), over half of whom are operational staff that carry out the upgrades and repairs to the network.

NGN is a private company funded indirectly through end-customers’ energy bills. Prices are regulated by Ofgem which sets the network price controls (‘RIIO’).

Why did the company raise money?

The funds raised in this investment partially funded the replacement of Northern Gas Networks’ gas pipe network, reducing carbon emissions and preparing the gas network if hydrogen is introduced in the future.

How does the company expect to repay the investment?

Northern Gas Networks expects to repay investors through the revenue earned from gas shippers who pay to transport gas through the company’s pipe network.

How is the company making an impact?

Reducing carbon emissions from our heating is essential to meeting our NetZero targets, but less progress has been made compared to our electricity network.

Since 2016 Northern Gas Networks has been trialling new infrastructure that allows homes to be heated in zero or low carbon ways using biomethane and hydrogen. The company has been involved in cutting edge research showing how hydrogen can play a role in delivering Net Zero, by displacing and replacing natural gas. Additionally, the company has led a huge project fixing and upgrading its vast network of pipelines from metallic mains to polyethylene. Not only has this prepared the gas network for hydrogen if it’s introduced but it also significantly reduces natural gas leaking and escaping from the the day to day operation of the network thus reducing the company’s emissions today.