Henry Hub is a natural gas distribution hub in Erath, Louisiana, that serves as the pricing benchmark for virtually all natural gas traded in the United States. When you see a natural gas price quoted in the news or on a financial site, it almost always refers to the price at Henry Hub. The facility itself is a physical network of pipelines and compressor stations, but its real significance is financial: it’s the official delivery point for natural gas futures contracts on the New York Mercantile Exchange (NYMEX).
The Physical Hub in Louisiana
Henry Hub sits in the small hamlet of Henry, within the town of Erath in Vermilion Parish, Louisiana. The name comes from a local high school, Henry High School, which once stood nearby before being damaged by Hurricanes Ike and Rita. The natural gas facilities themselves survived both storms with minimal damage.
The hub is owned by Sabine Pipe Line LLC, a subsidiary of EnLink Midstream Partners, which purchased it from Chevron in 2014. It connects to 13 major pipelines: nine interstate and four intrastate. These include well-known systems like Columbia Gulf Transmission, Southern Natural Pipeline, Transcontinental Pipeline (Transco), Trunkline Pipeline, and Texas Gas Transmission, among others. Two compressor stations push gas through the system, with a total transportation capacity of 1.8 billion cubic feet per day.
That web of pipeline connections is the core reason Henry Hub became the benchmark. In the late 1980s, when the NYMEX needed a delivery point for its new natural gas futures contract, it chose Henry Hub because so many pipelines converged there. Gas arriving from the Gulf of Mexico, Texas, and the broader Gulf Coast could flow into the hub and then be rerouted almost anywhere in the country. That connectivity made it the most liquid, most accessible point in the entire U.S. pipeline network.
Why It Sets the Price of Natural Gas
Every natural gas futures contract traded on the NYMEX is based on delivery at Henry Hub. The official daily closing price is set at 2:30 p.m. from the NYMEX trading floor for a specific delivery month. This price, usually quoted in dollars per million British thermal units (MMBtu), ripples outward to affect gas prices across North America. Utilities, power plants, industrial users, and gas producers all reference it when negotiating supply contracts.
The spot price at Henry Hub also serves as a baseline for regional pricing. Gas traded at other points along the pipeline network is typically priced as Henry Hub plus or minus a “basis differential,” which reflects local supply-and-demand conditions and the cost of transporting gas from Louisiana to that location. A pipeline hub in the Northeast might trade at a premium to Henry Hub during winter, for instance, because heating demand spikes and pipeline capacity into the region tightens.
What Moves the Price
Henry Hub prices respond to a handful of key forces, with weather being the most immediate. Cold snaps drive up heating demand and can simultaneously freeze wells, cutting production right when it’s needed most. In January 2025, Winter Storm Fern pushed heating demand sharply higher while triggering temporary well freeze-offs that reduced supply. That combination led to a withdrawal of 360 billion cubic feet from underground storage in a single week, the largest on record.
Beyond weather, production levels and infrastructure capacity play a major role. New pipeline capacity coming online in producing regions like the Permian Basin can increase the flow of gas to market and put downward pressure on prices. Conversely, when production growth stalls or pipeline bottlenecks trap gas in one region, prices at Henry Hub can climb. Storage levels matter too. The Gulf Coast region surrounding Henry Hub is home to salt cavern storage facilities, which can inject and withdraw gas rapidly to help balance short-term swings in supply and demand. Low storage heading into winter tends to push prices higher, while comfortable inventories keep them in check.
Henry Hub and the Global Gas Market
Henry Hub’s influence now extends well beyond U.S. borders. As the United States has become one of the world’s largest exporters of liquefied natural gas (LNG), the price at Henry Hub has become a reference point for international gas trade. Many long-term LNG supply contracts are indexed to Henry Hub, meaning buyers in Europe and Asia pay a price tied to the Louisiana benchmark plus liquefaction and shipping costs.
U.S. LNG export demand rose by an estimated 3 billion cubic feet per day in 2025 as new export terminal capacity came online. That growing demand adds a new structural floor under Henry Hub prices, because LNG terminals along the Gulf Coast are now a significant source of gas consumption. When global gas prices are high, export terminals run at full capacity, pulling more gas through Henry Hub and supporting domestic prices.
The relationship between Henry Hub and its European counterpart, the Title Transfer Facility (TTF) in the Netherlands, illustrates this dynamic. TTF prices have historically traded at a significant premium to Henry Hub, reflecting the cost of liquefying, shipping, and regasifying U.S. gas. But that spread can narrow dramatically. In recent periods, the TTF-Henry Hub spread tightened to around $4 per MMBtu as European prices fell roughly 35% year over year while Henry Hub prices surged more than 70%. When the spread shrinks below the cost of delivering U.S. LNG to Europe, it becomes uneconomical to export, which can redirect gas supply back into the domestic market and push Henry Hub prices lower.
How It Affects You
If you heat your home with natural gas or pay an electric bill powered partly by gas-fired plants, Henry Hub prices have a direct effect on what you pay. Utilities buy gas on contracts tied to Henry Hub, and those costs flow through to residential and commercial rates, sometimes with a lag of weeks or months. When Henry Hub spikes during a cold winter, you’ll typically see it reflected in your next heating bill or in seasonal rate adjustments from your utility.
For investors and traders, the Henry Hub futures contract is one of the most actively traded energy contracts in the world. It’s the standard tool for hedging natural gas price risk, used by producers locking in revenue, utilities managing fuel costs, and speculators betting on price direction. Exchange-traded funds that track natural gas prices are also tied to Henry Hub futures, making it the entry point for retail investors looking for exposure to gas markets.