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The Henry Hub is a
distribution hub on the
natural gas
Natural gas (also called fossil gas or simply gas) is a naturally occurring mixture of gaseous hydrocarbons consisting primarily of methane in addition to various smaller amounts of other higher alkanes. Low levels of trace gases like carbo ...
pipeline system in
Erath, Louisiana
Erath is a town in Vermilion Parish, Louisiana, United States. The population was 2,114 at the 2010 census, and 2,030 at the 2020 population estimates program. It is part of the Abbeville micropolitan statistical area.
History
Erath is named a ...
, 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. The second-largest direct descendant of Standard Oil, and originally known as the Standard Oil Company of California (shortened to Socal or CalSo), it is headquartered in S ...
in 2014. Due to its importance, it lends its name to the
pricing point for
natural gas
Natural gas (also called fossil gas or simply gas) is a naturally occurring mixture of gaseous hydrocarbons consisting primarily of methane in addition to various smaller amounts of other higher alkanes. Low levels of trace gases like carbo ...
futures contract
In finance, a futures contract (sometimes called a 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 asset ...
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 swap
Swap or SWAP may refer to:
Finance
* Swap (finance), a derivative in which two parties agree to exchange one stream of cash flows against another
* Barter
Science and technology
* Swap (computer programming), exchanging two variables in t ...
s traded on
Intercontinental Exchange
Intercontinental Exchange, Inc. (ICE) is an American company formed in 2000 that operates global financial exchanges and clearing houses and provides mortgage technology, data and listing services. Listed on the Fortune 500, S&P 500, and Russell ...
(ICE).
It interconnects with nine interstate and four intrastate pipelines: Acadian,
Columbia Gulf Transmission,
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. The system is owned by a limited partnership. The system connects to Henry Hub in Louisiana. It ...
,
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 subfamilies ...
,
Southern Natural Pipeline,
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 FER ...
,
Transcontinental Pipeline
Transcontinental Gas Pipe Line (Transco) 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 ...
,
Trunkline Pipeline Trunkline Pipeline is a natural gas pipeline system 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, Egan Hub, an ...
, 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 (produ ...
and future
natural gas prices
Natural gas prices, as with other commodity prices, are mainly driven by supply and demand fundamentals. However, natural gas prices may also be linked to the price of crude oil and petroleum products, especially in continental Europe. ...
set at Henry Hub are denominated in US$ per millions of
British thermal unit
The British thermal unit (BTU or Btu) is a unit of heat; it is 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 States customary units. The modern SI ...
s and are generally seen to be the primary price set for the North American natural gas market. North American unregulated
wellhead
A wellhead is the component at the surface of an oil or gas well that provides the structural and pressure-containing interface for the drilling and production equipment.
The primary purpose of a wellhead is to provide the suspension point and ...
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
Rita may refer to:
People
* Rita (given name)
* Rita (Indian singer) (born 1984)
* Rita (Israeli singer) (born 1962)
* Rita (Japanese singer)
* Eliza Humphreys (1850–1938), wrote under the pseudonym Rita
Places
* Djarrit, also known as Rita, a ...
, (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 manned by the
International Union of Operating Engineers
The International Union of Operating Engineers (IUOE) is a trade union within the United States-based AFL–CIO representing primarily construction workers who work as heavy equipment operators, mechanics, surveyors, and stationary engineers (also ...
. 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.
See also
*
Petroleum in the United States
Petroleum has been a major industry in the United States since shortly after the oil discovery in the Oil Creek area of Titusville, Pennsylvania in 1859. The industry includes exploration, production, processing ( refining), transport ...
References
External links
* (enlink.com)
NG Futures traded at CME/NYMEXHenry Hub Derivatives traded at ICEEnergy Information Administration, Natural Gas Weekly UpdateShows 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