Here Comes The Gas Again – Why Henry Hub is Sitting Pretty

At first glance, the recent purchase of a natural gas pipeline network in southern Louisiana by EnLink Midstream from Chevron does not look very exciting. One of the assets - the Sabine pipeline – backbone of the Henry Hub CME NYMEX natural gas futures contract - reported losses of $7.5 Million and total flows averaging only 200 MMcf/d on Federal Energy Regulatory Commission (FERC) Form 2 in 2013. So what is the value of the pipelines tied to the world’s third largest futures contract? Turns out the Henry Hub futures contract generates some pretty good revenue for the pipeline operator without moving a molecule of gas. And there’s a bright future ahead for gas pipeline networks in Louisiana these days. We explain why in today’s blog.

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