Core Gas Terminal On Operation Again After Katrina

One of the most strategically important natural gas terminals in the United States survived Hurricane Katrina and was back in operation late Monday.

Henry Hub, the southern Louisiana facility connects with nine interstate and four intrastate pipelines and is the pricing location for natural gas futures contracts traded on the NYMEX.

Force majeure, which allows companies to depart from strict contract terms in times of natural disaster or political crisis, came into play before Katrina began to roar through Louisiana, the Wall Street Journal said. Sabine Pipeline closed delivery Sunday night in and out of the site.
As individual flows are reinstated, Sabine will return to full service, ending the force majeure condition previously noticed, said Sabine Pipeline LLC, operator of the Erath, La., facility. Earlier, the New York Mercantile Exchange halted August deliveries -- the first time it has taken such a step in its history.

A shutdown to Henry Hub is a crisis situation for the markets, said Agbeli Ameko, managing partner at First Enercast Financial. Thus, as futures expire, there will be no facility for gas delivery. This is an unprecedented situation that has never happened in the history of the Nymex futures contracts.