Components of Natural Gas Pricing
NYMEX – New York Mercantile Exchange
This is the commodity portion of your natural gas price. Natural gas futures contracts are traded on the NYMEX each business day between the hours of 9:00 AM and 2:30 PM for the regular session. The forward month, which is the next month to close, settles 3 business days prior to the start of gas flow. Should you wish to “trigger” the price of your gas, this trigger must be placed and must be filled prior to the settlement of that month’s contract. Should a trigger not be placed or filled, the NYMEX portion of the price reverts to the NYMEX settle for that month.
Transportation Basis
Each gas price is made up of 2 pieces: the NYMEX and the transportation basis. The transportation basis is the cost of the pipeline capacity to move your natural gas from the NYMEX equivalent point, which is the Henry Hub in Louisiana, to your delivery point, which is the citygate of your LDC. The basis may be a premium or a discount that is added or subtracted from the NYMEX price.
Citygate Delivered Price = NYMEX Trigger or Settle Plus Transportation Basis
Example: January NYMEX Settle was $3.189 + Transportation Basis of $.55 = Citygate Delivered Price of $3.739 per Dth
| From | To | Multiply by |
| MMBTU | BTU | 1,000,000 |
| MMBTU | MCF | 1 |
| MMBTU | CCF | 0.01 |
| MMBTU | Dth | 1 |
| MMBTU | Therm | 10 |
| MMBTU | Gallon of #2 Oil | 7.1429 |
| MMBTU | KW | 292.9974 |
| KWH | MCF | 0.0034 |
All of the following are equivalent to 1 MMBtu
- Electricity: 293.083 kWh @ 3412 Btu/kWh
- Natural Gas: 1 MCF, 10 therms, 1 Dth, or 1,000 cu ft
- Coal: 83.34 lbs @ 12,000 Btu/lb
- Propane: 10.917 gal @ 91,000 Btu/gal
- Gasoline: 8.0 gal @ 125,000 Btu/gal
- Fuel Oil #2: 7.194 gal @ 139,000 Btu/gal
- Wood: 285.7 lbs @ 3,500 Btu/lb