Henry Hub is a natural gas pipeline distribution system in Erath, Louisiana. The facility is owned and operated by the Sabine Pipe Line LLC. The hub has interconnections with four intrastate and nine interstate pipelines, namely Sabine, Jefferson Island, Trunkline Pipelines, Transcontinental Pipeline, Columbia Gulf Transmission, Acadian, Gulf South Pipeline, NGPL, Bridgeline, Sea Robin, Texas Gas Transmission, and Southern Natural Pipeline. These pipelines make a part of the highly-integrated US transmission grid.
Henry Hub has two compressor stations that can compress 520,000 decatherms per day and transport 1.8 billion cubic feet per day.
Naming of Henry Hub
Henry Hub is named after the Henry hamlet in Erath where it is located. The hamlet was named after the Henry High School that stood there for more than a century before it was damaged by Hurricane Rita and Ike. The school was named after its benefactor, an immigrant from Germany, named Ludwig Wilhelm Kattentidt, who replaced his surname with Henry. To this day, there are Henry descendants living in the area.
Understanding Henry Hub
Henry Hub is the property of Sabine Pipe Line LLC and affiliates. These company is a full-service header system and offers several delivery and receipt capabilities, a widespread interconnection with the most important pipelines in the US, and hub management services.
Sabine provides transportation services for both the Henry Hub and Sabine’s gas mainline.
What’s the Sabine Pipeline?
The Sabine Pipeline is a bidirectional interstate mainline that extends from Port Arthur, TX, to Henry Hub in Louisiana. The pipeline is certified as an open-access gas transporter and is linked to one producer and four industrial consumers.
Regional Production
Henry Hub enjoys a very strategic location if we look at the regional production. Texas produced an average of 637,021 million cubic feet of natural gas monthly since January 2014. This accounts for a total of 27% of the United States’ marketed production, making the state the biggest producer of natural gas.
Louisiana also produced an average of 155,481 million cubic feet monthly form January 2014 to November 2016, accounting for 7% of the marketed production in the US.
Henry Hub’s Storage Facilities
The company is also linked directly to multiple storage facilities, including those in Jefferson Island, Acadian, and Sorrento. These facilities offer high deliverable and cycling rate, which enable several withdrawal and injection cycles every year.
The hub is situated in the Southwest which is characterized by the most extensive and developed network of pipeline in the US. This allows the delivery of natural gas to be made from the supply basic to major consumption markets.
Giving the strategic, location, and logistical characteristics of Henry Hub, it is no surprise that local markets in the country price their natural gas grounded in a differential to the facility. This differential considers transportation costs, regional market conditions, and capacity of available transmission between locations.