Pittsburgh-Area Gas Hub Could Challenge Henry Hub as Benchmark

dominion-south-pointPower Source

By Anya Litvak

People love a benchmark, even one that may no longer make sense, says David Marks, owner of Duquesne-based natural gas and power marketing firm PA Energy Fuels LLC.

That’s why the Henry Hub — a physical place in Louisiana that was once the most popular trading spot for natural gas in the country — remains the price setter for all sorts of trades and financial instruments involving natural gas for the foreseeable future, he said.

That’s despite the fact that over the past two years the volume of gas flowing through the gates at the Henry Hub has been dwarfed by what’s trading at a hub just northeast of Pittsburgh — Dominion South Point.

For several years, speculation about Dominion South Point replacing Henry Hub as a benchmark has been swirling around the industry, but little has changed in the way energy futures are priced.

Read more

Comments are closed.