National Fuel Gas Company (NFG) Business Profile

What it does

National Fuel Gas Company is a holding company whose subsidiaries produce, gather, transport, store and distribute natural gas. Its assets are centered in western New York and Pennsylvania, and its operations are linked by their connection to gas production in the Appalachian Basin. The company was incorporated in 1902. David P. Bauer is president and chief executive officer.

The business begins with Seneca Resources, which explores for and develops natural gas reserves, principally in the Marcellus and Utica shales. National Fuel Gas Midstream builds and operates gathering pipelines and processing facilities that move gas from producing areas, primarily for Seneca. The pipeline and storage business then transports gas for affiliated and unaffiliated customers and stores gas underground.

At the end of the chain, National Fuel Gas Distribution delivers gas through its local utility system to homes and businesses in western New York and northwestern Pennsylvania. The utility also supplies gas to customers who choose it as their commodity supplier; customers can choose other suppliers while continuing to use the utility’s delivery network.

The company reports three segments: Integrated Upstream and Gathering, Pipeline and Storage, and Utility. Their common footprint lets the subsidiaries share management, labor, facilities and support services and coordinate projects to move Appalachian gas to markets in the eastern United States and Canada.

How it makes money

Integrated Upstream and Gathering earns income from developing and producing natural gas and from gathering and processing it. Seneca sells gas at a combination of current market prices, indexed prices and fixed prices. It also uses hedging contracts to reduce exposure to price declines, although those contracts can limit the benefit of price increases. Midstream’s gathering business primarily serves Seneca and also serves other Appalachian producers.

Pipeline and Storage charges customers to transport and store gas. Federal regulators approve the rates that the pipeline subsidiaries may charge and those rates affect the returns they can earn on assets dedicated to those services. Fixed monthly reservation charges recover fixed costs, while charges based on volumes are designed to recover variable transportation or storage costs. The segment generated approximately 35% of its revenues in 2025 from services provided to the company’s Utility or Integrated Upstream and Gathering segments.

The Utility charges for local gas delivery under rates approved by regulators in New York and Pennsylvania. In both states, utility cost of service is recovered through delivery rates and charges rather than gas commodity service. Weather affects gas volumes, but weather normalization adjustments in both jurisdictions largely mitigate the effect on utility margins and cash flow.

In 2025, Integrated Upstream and Gathering contributed net income of $324.7 million, Pipeline and Storage $121.0 million, and Utility $83.2 million. In the third quarter of fiscal 2026, Integrated Upstream and Gathering production was 104 Bcf. The company also incurs corporate costs: All Other and Corporate operations recorded a net loss of $10.4 million in 2025.

Customers and how it sells

National Fuel’s utility serves approximately 756,000 customers through a local distribution system in western New York and northwestern Pennsylvania. Its service areas include Buffalo, Niagara Falls and Jamestown in New York, and Erie and Sharon in Pennsylvania. Residential and commercial customers use gas largely for space heating; the utility also serves large commercial and industrial users.

Customers in both states can choose their gas commodity supplier. The utility has retained a substantial majority of its small sales customers, while almost all large commercial and industrial customers are served by marketers. The utility continues to provide delivery service to customers using other suppliers unless gas is transported directly to an end user without its facilities.

Pipeline and Storage transports gas for affiliated and unaffiliated companies and stores gas owned by its customers. Its networks connect Appalachian production with markets in New York, Pennsylvania, the northeastern United States and Canada. Gathering services are provided primarily to Seneca and, to a lesser extent, other Appalachian producers. One customer accounted for revenue in both Integrated Upstream and Gathering and Pipeline and Storage in the year ended September 30, 2025.

The company has agreed to acquire an Ohio gas utility. The acquisition remained pending in the third quarter of fiscal 2026, when the company reported that Ohio regulators had approved it.

Suppliers and costs

Natural gas is the utility’s principal raw material. It buys gas from producers and suppliers under multi-month contracts and in the spot market, rather than purchasing it directly from affiliates. The utility purchased 77.4 Bcf of gas in 2025, including gas for retail customers and its own operations. Spot-market purchases accounted for 54% of its gas purchases that year.

DTE Energy Trading, Emera Energy Services, Chevron Natural Gas, Shell Energy North America and NRG Business Marketing together accounted for nearly 67% of the utility’s 2025 gas purchases. DTE Energy Trading was the largest named supplier. No other producer or supplier provided more than 5% of the utility’s gas requirements that year.

Other costs include drilling, well completion, gathering, pipeline and utility operations, labor, and interest on borrowings. National Fuel continues to invest in modernization of its regulated assets. The company said its fiscal 2026 capital guidance had increased at the midpoint, primarily because of higher diesel and oil prices and schedule changes. A new labor agreement with Pennsylvania field operations employees also increased costs; the company included that increase in its Pennsylvania utility rate case.

Competitive position

National Fuel competes with integrated and independent gas producers and marketers when selling gas and acquiring mineral rights and leases. Its gathering business competes with other gathering and processing companies. Its pipeline subsidiaries compete with other pipeline and storage providers for market growth, while the utility faces gas marketers, potential pipeline bypasses and alternatives such as fuel oil, geothermal systems and electrification. No competing companies are named in the available competition descriptions.

The company competes on price, service, reliability and product performance. Its utility’s delivery charges recover its cost of service even when customers choose an alternative gas commodity supplier. Large users can nevertheless receive gas directly from local producers or pipeline companies without using the utility’s facilities.

Our reading: The utility’s established delivery network and regulated recovery of its cost of service provide a meaningful competitive position, although bypass and competing energy sources constrain it. Our reading: The pipeline network’s proximity to Appalachian production and its interconnections with other systems support its position, but competing pipelines and storage providers also seek market growth. Our reading: Integration of production and gathering helps coordinate drilling and gas delivery, although Seneca still competes for leases and sells into markets where prices can fluctuate.

Growth opportunities

National Fuel’s growth plans include developing its Appalachian gas reserves, expanding transportation capacity and adding regulated utility assets. Production increased 34 Bcfe, or 9%, during the year ended September 30, 2025 to a total of 427 Bcfe. The company expects fiscal 2026 production of between 420 and 430 Bcfe after well interactions affected near-term output.

The company has expanded its planned Line N system upgrade by 200,000 dekatherms per day. The revised project has a target in-service date of November 2028, and the incremental capacity is contracted for 20 years to support the initial phase of conversion from coal to gas at the Shippingport Power Station. National Fuel also sees interest in further Line N capacity for data centers and power generation in southwest Pennsylvania.

The Tioga Pathway project is designed to move shale gas toward Mid-Atlantic markets. National Fuel is also pursuing additional acreage in Tioga County, where Seneca already holds a position. The company sees an opportunity to spend approximately $100 million to $200 million of discretionary capital over the next several years to secure additional acreage.

The pending Ohio utility acquisition would expand National Fuel beyond its New York and Pennsylvania utility territories. The company expects the acquisition to double its utility rate base and is targeting an October 1 closing date. It has issued equity and added long-term debt as part of the financing.

Structural risks

• Gas prices and hedging: Upstream results depend materially on natural gas prices. Hedging reduces exposure to price declines but can limit gains when prices rise; rising prices can also trigger collateral calls.
• Financing: The company relies on borrowing and capital markets to fund needs not met by operating cash flow. Higher rates, credit downgrades or limited market access could increase costs or restrict funding and refinancing.
• Regulation and climate policy: Regulators approve pipeline and utility rates. If approved rates do not cover increased costs, earnings may decrease. Climate measures could increase costs, restrict gas use or reduce demand.
• Project execution: Permitting delays, opposition, land-rights issues or construction changes can delay projects, increase costs or prevent completion. Gathering or pipeline delays can also impede Seneca’s ability to transport production.
• Operational and reserve uncertainty: Wells, pipelines and storage facilities face hazards including fires, blowouts and ruptures. Reserve estimates depend on assumptions about geology, prices and costs and can be revised. Fracture interactions between Lower Utica wells also affected near-term production.

Bottom line

Our reading

National Fuel combines gas production exposed to commodity prices with pipeline and utility operations whose rates are regulated. Our reading: Its shared Appalachian footprint links production to transportation and local delivery, while growth depends in part on building infrastructure and completing the pending Ohio acquisition. Our reading: Commodity prices, regulatory decisions and access to financing remain important exposures across that business.