NG pricing, Henry Hub vs City Gate

conversiontime

Hey everyone



Just wanted to make a brief FYI for those considering conversion from oil to NG or are just curious about the price of NG. As I have discovered in my first winter post conversion, NG prices vary widely by geographic location, distribution, demand and other factors. The point being when I did all my research one major incorrect assumption was made that I hope others can avoid. What your local NG utility pays is not based on Henry Hub quotes that drive the futures market, but rather the cost at the "city gate" access point where the utility takes delivery from pipeline. In my area during the heart of winter, the cost per therm is almost double what is trading on HH. My utility changes cost per therm every month.



Still saving money but wish I had thought to request historical month by month therm cost before hand. I suspect once heating oil and NG spread return to more historical level NG in my area will be equal if not more based on high city gate delivery.

SWEI

you have to look at the bill

which includes a number of other charges.  Seasonal price trends matter, but you need to look at those in the context of wholesale prices in order to even begin to understand them.



Thanks to ever-increasing demand from the transportation sector, liquid fuels currently command a significant premium per BTU over gaseous fuels.  Everything I read indicates this premium will continue and perhaps even increase.  If you have information to the contrary, please share it.