Henry Hub
Encyclopedia
]
The Henry hub is the pricing point for natural gas
futures contract
s traded on the New York Mercantile Exchange
(NYMEX). It is a point on the natural gas
pipeline system in Erath, Louisiana
. It is owned by Sabine Pipe Line LLC.
It interconnects with nine interstate and four intrastate pipelines: Acadian
, Columbia Gulf Transmission
, Gulf South Pipeline
, Bridgeline, NGPL
, Sea Robin
, Southern Natural Pipeline
, Texas Gas Transmission
, Transcontinental Pipeline
, Trunkline Pipeline
, Jefferson Island, and Sabine. The two compressor stations can compress 520,000 decatherm/d (6.3 GW) . The transportation capacity is 1.8 billion ft³/d (bcf) (590 m³/s) (20.4 GW) (Sabine Pipe Line, LLC, 2000).
Spot
and future prices set at Henry hub are denominated in $/mmbtu (millions of British thermal unit
s) and are generally seen to be the primary price set for the North American natural gas market. North American unregulated wellhead and burnertip natural gas prices are closely correlated to those set at Henry Hub.
The area surrounding the Henry hub was affected by the flooding and storm surge from Hurricanes Ike
and Rita
, but the facility suffered minimal damage.
The Henry hub is the pricing point for natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
futures contract
Futures contract
In finance, a futures contract is a standardized contract between two parties to exchange a specified asset of standardized quantity and quality for a price agreed today with delivery occurring at a specified future date, the delivery date. The contracts are traded on a futures exchange...
s traded on the New York Mercantile Exchange
New York Mercantile Exchange
The New York Mercantile Exchange is the world's largest physical commodity futures exchange. It is located at One North End Avenue in the World Financial Center in the Battery Park City section of Manhattan, New York City...
(NYMEX). It is a point on the natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
pipeline system in Erath, Louisiana
Erath, Louisiana
Erath is a town in Vermilion Parish, Louisiana, United States. The population was 2,187 at the 2000 census. It is part of the Abbeville Micropolitan Statistical Area.Erath is home of the Acadian Museum....
. It is owned by Sabine Pipe Line LLC.
It interconnects with nine interstate and four intrastate pipelines: Acadian
Acadian
The Acadians are the descendants of the 17th-century French colonists who settled in Acadia . Acadia was a colony of New France...
, Columbia Gulf Transmission
Columbia Gulf Transmission
Columbia Gulf Transmission gathers gas in the Gulf of Mexico and brings it to Columbia Gas Transmission. It is owned by NiSource. Its FERC code is 70....
, Gulf South Pipeline
Gulf South Pipeline
Gulf South Pipeline is a natural gas pipeline system that transports gas between south and east Texas, Louisiana, Alabama, Mississippi, and Florida. It connects to Henry Hub in Louisiana. Its FERC code is 11. It was formerly named United Gas Pipe Line Company....
, Bridgeline, NGPL
Natural Gas Pipeline Company of America
Natural Gas Pipeline Company of America is a natural gas pipeline which brings gas from the Texas Permian Basin and Gulf of Mexico into the Chicago area. It has two legs, one which goes to New Mexico and the other of which goes to the Gulf of Mexico. The legs of the pipeline crossover proximate...
, Sea Robin
Sea Robin Pipeline
Sea Robin Pipeline is a natural gas pipeline which brings natural gas from the offshore Gulf of Mexico into Louisiana. It connects into the Henry Hub. It is owned by Panhandle Energy. Sea Robin was formerly owned by Sonat, Inc. through its subsidiary Southern Natural Gas Company. Sonat was...
, Southern Natural Pipeline
Southern Natural Pipeline
Southern Natural Pipeline is a natural gas pipeline system which brings gas from the Louisiana Gulf of Mexico coast to the southeastern United States. It also has a connection to the Elba Island LNG terminal in Georgia. It is owned by El Paso Corporation and is part of its Birmingham, Alabama...
, Texas Gas Transmission
Texas Gas Transmission
Texas Gas Transmission is a natural gas pipeline which brings gas from the Louisiana Gulf coast up through Arkansas, Mississippi, Tennessee, and Kentucky, to supply gas to Illinois, Indiana, and Ohio. It is owned by Boardwalk Pipelines. Its FERC code is 18....
, Transcontinental Pipeline
Transcontinental Pipeline
Transcontinental Pipeline is a natural gas pipeline which brings gas from the Gulf coast of Texas, Louisiana, Mississippi, and Alabama, through Georgia, South Carolina, North Carolina, Virginia, Maryland, and Pennsylvania to deliver gas to the New Jersey and New York City area. It is owned by the...
, Trunkline Pipeline
Trunkline Pipeline
Trunkline Gas Company, LLC is a natural gas pipeline which brings gas from the Gulf coast of Texas and Louisiana through Mississippi, Arkansas, Tennessee, and Kentucky to deliver gas in Illinois and Indiana. It connects to the Henry Hub. It is owned by Panhandle Energy - Southern Union Gas...
, Jefferson Island, and Sabine. The two compressor stations can compress 520,000 decatherm/d (6.3 GW) . The transportation capacity is 1.8 billion ft³/d (bcf) (590 m³/s) (20.4 GW) (Sabine Pipe Line, LLC, 2000).
Spot
Spot price
The spot price or spot rate of a commodity, a security or a currency is the price that is quoted for immediate settlement . Spot settlement is normally one or two business days from trade date...
and future prices set at Henry hub are denominated in $/mmbtu (millions of British thermal unit
British thermal unit
The British thermal unit is a traditional unit of energy equal to about 1055 joules. It is approximately the amount of energy needed to heat of water, which is exactly one tenth of a UK gallon or about 0.1198 US gallons, from 39°F to 40°F...
s) and are generally seen to be the primary price set for the North American natural gas market. North American unregulated wellhead and burnertip natural gas prices are closely correlated to those set at Henry Hub.
The area surrounding the Henry hub was affected by the flooding and storm surge from Hurricanes Ike
Hurricane Ike
Hurricane Ike was the second-costliest hurricane ever to make landfall in the United States, the costliest hurricane ever to impact Cuba and the second most active hurricane to reach the Canadian mainland in the Great Lakes Region after Hurricane Hazel in 1954...
and Rita
Hurricane Rita
Hurricane Rita was the fourth-most intense Atlantic hurricane ever recorded and the most intense tropical cyclone ever observed in the Gulf of Mexico. Rita caused $11.3 billion in damage on the U.S. Gulf Coast in September 2005...
, but the facility suffered minimal damage.
External links
- Sabine's site for Henry Hub
- Schematic for Henry Hub
- Henry Hub Natural Gas Price Daily Report Outdated
- Energy Information Administration, Natural Gas Weekly Update Shows Henry Hub natural gas prices
- Henry Hub Natural Gas Business News for USA Broken
- Natural Gas Business Prices
