Henry Hub

Henry Hub, located in Erath, Louisiana, interconnects multiple natural gas pipelines, meaning that gas can be transferred from one pipeline to another. The hub is owned and operated by Sabine Pipeline LLC and its affiliates. Henry Hub connects nine interstate and four intrastate pipelines. Henry Hub has a direct connection to the Jefferson Island, Acadian, and Sorrento storage facilities. The hub also includes compression so that gas can be transferred from lower pressure to higher pressure pipelines. 

Pipelines interconnecting at Henry Hub

Given its location and facilities, Henry Hub is a natural location for natural gas trading. In 1989 it was selected as the official delivery point for the New York Mercantile Exchange (NYMEX) natural gas futures contract. Over time the Henry Hub price became the key reference price for gas trading in the United States. Many gas contracts across the U.S. are priced using an index tied to Henry Hub futures or spot prices, plus a basis reflecting the regional price differential from Henry Hub to the contract location. Today, Henry Hub is the pricing point for natural gas futures contracts on CME’s New York Mercantile Exchange (NYMEX) and the over-the-counter swaps traded on Intercontinental Exchange (ICE).