EnLink Midstream (ENLK.N) (ENLC.N) said on Monday it had signed a $235 million deal with Chevron Corp (CVX.N) to buy natural gas pipelines in Southern Louisiana, including those linked to the Henry Hub supply point that sets U.S. futures prices.
EnLink plans to acquire about 1,400 miles of pipelines from Beaumont, Texas, to the Mississippi River corridor that carry about 11 billion cubic feet of working natural gas storage capacity in Southern Louisiana.
These assets, combined with EnLink's existing Louisiana operations, will allow the company to provide services to Southern Louisiana's growing industrial, refining and petrochemical marketplace, it said in a statement.
In particular, the deal gives EnLink ownership and management of the Henry Hub, the benchmark for natural gas futurescontracts on the New York Mercantile Exchange. Henry Hub is connected to 13 major interstate and intrastate natural gas pipeline and storage systems.
The Henry Hub, though still important for U.S. gas pricing, has been surpassed as the most active place for trading the physical form of the fuel by hubs in shale-rich Pennsylvania and elsewhere.
A decade ago, the federal Gulf of Mexico pumped about 20 percent of all U.S. natural gas, much of which flowed through the Henry Hub. Now it produces just 4 percent of the nation's total.
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