The Henry Hub is a distribution hub on the

natural gas Natural gas (also fossil gas, methane gas, and gas) is a naturally occurring compound of gaseous hydrocarbons, primarily methane (95%), small amounts of higher alkanes, and traces of carbon dioxide and nitrogen, hydrogen sulfide and helium ...

pipeline system in Erath, Louisiana, owned by Sabine Pipe Line LLC, a subsidiary of EnLink Midstream Partners LP who purchased the asset from

Chevron Corporation Chevron Corporation is an American multinational energy corporation predominantly specializing in oil and gas. The second-largest direct descendant of Standard Oil, and originally known as the Standard Oil Company of California (shortened t ...

in 2014. Due to its importance, it lends its name to the pricing point for

futures contract In finance, a futures contract (sometimes called futures) is a standardized legal contract to buy or sell something at a predetermined price for delivery at a specified time in the future, between parties not yet known to each other. The item tr ...

s traded on the

New York Mercantile Exchange The New York Mercantile Exchange (NYMEX) is a commodity futures exchange owned and operated by CME Group of Chicago. NYMEX is located at One North End Avenue in Brookfield Place in the Battery Park City section of Manhattan, New York City. ...

(NYMEX) and the OTC swaps traded on

Intercontinental Exchange Intercontinental Exchange, Inc. (ICE) is an American multinational financial services company formed in 2000 that operates global financial exchanges and clearing houses and provides mortgage technology, data and listing services. Listed on the ...

(ICE). It interconnects with nine interstate and four intrastate pipelines: Acadian, Columbia Gulf Transmission, Gulf South Pipeline, Bridgeline, NGPL,

Sea Robin Prionotinae is a subfamily of demersal, marine ray-finned fishes, part of the family Triglidae. The fishes in this subfamily are called sea robins and are found in the Western Atlantic and Eastern Pacific Oceans, the other two Triglid subfamili ...

, 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).

Spot Spot or SPOT may refer to: Places * Spot, North Carolina, a community in the United States * The Spot, New South Wales, a locality in Sydney, Australia * South Pole Traverse, sometimes called the South Pole Overland Traverse People * Spot Coll ...

and future

natural gas prices Nature is an inherent character or constitution, particularly of the ecosphere or the universe as a whole. In this general sense nature refers to the laws, elements and phenomena of the physical world, including life. Although humans are part ...

set at Henry Hub are denominated in US$ per millions of

British thermal unit The British thermal unit (Btu) is a measure of heat, which is a form of energy. It was originally defined as the amount of heat required to raise the temperature of one pound of water by one degree Fahrenheit. It is also part of the United Stat ...

s and are generally seen to be the primary price set for the North American natural gas market. North American unregulated wellhead prices are closely correlated to those set at Henry Hub.

History

The "Henry" hub is so named for its location in the Henry hamlet of Erath, which was named after the Henry High School that stood there until damaged by the flooding and storm surge from Hurricanes Ike (2008) and Rita (2005), though the natural gas facilities suffered minimal damage. This school was named for its benefactor, William Henry, who originally immigrated from Germany as Ludwig Wilhelm Kattentidt circa 1840, and replaced his surname with Henry, taken from his father's middle name 'Heinrich'. There are Henry descendants in the area to this day. It was customary for benefactors to sponsor schools; there were other similarly sponsored schools in Vermilion Parish around that time. Henry Hub began operations during the early 1950s when Stone and Webster, Inc. built the original facility with unionized labor for The Texas Company (Texaco). The facility was staffed by the International Union of Operating Engineers. In the 1960s, the Texas Company built and operated an adjoining facility, Sea Robin Plant, without utilizing union labor based on right-to-work laws implemented in Louisiana. By the 2000s, all of the unionized labor were replaced by contract laborers when Texaco and Chevron merged in October 2000. NYMEX began offering standardized natural gas contracts with delivery at the Henry Hub in April 1990. In 2011, the Henry Hub was the site of a land dispute, in which Sabine sued to condemn land near the site of their hub, and expropriate it from the Broussard family, who had owned it for generations, arguing that it was acting in the national interest. The lawsuit was settled in 2012, and in 2013 a second, older, lawsuit was settled with Texaco (like Sabine, a Chevron company) for contamination of Broussard land which Texaco had leased for many decades.

References

External links

* (enlink.com)
NG Futures traded at CME/NYMEX

Henry Hub Derivatives traded at ICE

Energy Information Administration, Natural Gas Weekly Update
Shows Henry Hub natural gas prices {{coord, 29, 53, 55, N, 92, 4, 7, W, type:city, display=title Business terms Natural gas pipelines in the United States Natural gas trading hubs Vermilion Parish, Louisiana 1950s establishments in Louisiana

History

See also

References

External links