SUBMISSION COVER SHEET

IMPORTANT: Check box if Confidential Treatment is requested 

Registered Entity Identifier Code (optional): 23-371 (3 of 3)

Organization: New York Mercantile Exchange, Inc. ("NYMEX")

Filing as a: DCM SEF DCO SDR 

Please note - only ONE choice allowed.

Filing Date (mm/dd/yy): 09/26/23 Filing Description: Initial Listing of the Micro Henry Hub 

Natural Gas Futures, Micro Henry Hub Natural Gas Option, and Micro Henry Hub Natural 

Gas Friday Weekly Option Contracts

SPECIFY FILING TYPE 

Please note only ONE choice allowed per Submission.

Organization Rules and Rule Amendments

Certification § 40.6(a)

Approval § 40.5(a)

Notification § 40.6(d)

Advance Notice of SIDCO Rule Change § 40.10(a)

SIDCO Emergency Rule Change § 40.10(h)

Rule Numbers: 

New Product Please note only ONE product per Submission.

Certification § 40.2(a) 

Certification Security Futures § 41.23(a)

Certification Swap Class § 40.2(d)

Approval § 40.3(a)

Approval Security Futures § 41.23(b)

Novel Derivative Product Notification § 40.12(a)

Swap Submission § 39.5

Product Terms and Conditions (product related Rules and Rule Amendments)

Certification § 40.6(a) 

Certification Made Available to Trade Determination § 40.6(a)

Certification Security Futures § 41.24(a)

Delisting (No Open Interest) § 40.6(a) 

Approval § 40.5(a)

Approval Made Available to Trade Determination § 40.5(a)

Approval Security Futures § 41.24(c)

Approval Amendments to enumerated agricultural products § 40.4(a), § 40.5(a)

“Non-Material Agricultural Rule Change” § 40.4(b)(5)

Notification § 40.6(d)

Official Name(s) of Product(s) Affected: See filing.

Rule Numbers: See filing.
300 Vesey Street New York, NY 10282 T 212 299 2200 F 212 301 4645 christopher.bowen@cmegroup.com cmegroup.com

1

Christopher Bowen 

Managing Director and Chief Regulatory Counsel

Legal Department

September 26, 2023

VIA ELECTRONIC PORTAL

Mr. Christopher J. Kirkpatrick

Office of the Secretariat

Commodity Futures Trading Commission

Three Lafayette Centre

1155 21st Street, N.W.

Washington, DC 20581

Re: CFTC Regulation 40.2(a) Certification. Initial Listing of the Micro Henry Hub Natural 

Gas Futures, Micro Henry Hub Natural Gas Option, and Micro Henry Hub Natural Gas 

Friday Weekly Option Contracts.

NYMEX Submission No. 23-371 (3 of 3)

Dear Mr. Kirkpatrick:

New York Mercantile Exchange, Inc. (“NYMEX” or “Exchange”) is certifying to the Commodity Futures 

Trading Commission (“CFTC” or “Commission”) the initial listing of the Micro Henry Hub Natural Gas 

Futures, Micro Henry Hub Natural Gas Option, and Micro Henry Hub Natural Gas Friday Weekly Option 

contracts (the “Contracts”) for trading on the CME Globex electronic trading platform (“CME Globex”) and 

for submission for clearing via CME ClearPort, effective Sunday, November 5, 2023, for trade date Monday, 

November 6, 2023, as more specifically described below.

Contract Title Micro Henry Hub 

Natural Gas Futures

Micro Henry Hub Natural 

Gas Option

Micro Henry Hub Natural 

Gas Friday Weekly Option

Commodity Code MNG MNO MN1; MN2; MN3; MN4; MN5

Rulebook Chapter 440 441 442

Price Quotation U.S. Dollars and Cents per One Million British Thermal Unit (“MMBtu”)

Contract Size 1000 MMBtu

Minimum Price 

Fluctuation $0.001

Value per Tick $1.00

Settlement Type Financial

CME Globex 

Matching Algorithm F-FIFO

Listing Schedule Monthly contracts listed for 24 consecutive months

Weekly contracts listed for 2 

weeks

Initial Listing Dec-23 - Nov-25 Nov Wk2 & Nov Wk3

Termination of 

Trading

Trading terminates one 

(1) business day prior 

to the expiration of the 

corresponding contract 

month of the Henry 

Trading terminates on the 

second business day 

immediately preceding the 

expiration of the underlying 

Trading terminates on Friday 

of the contract week. If Friday 

is not a business day trading 

terminates on the prior 

business day. 
300 Vesey Street New York, NY 10282 T 212 299 2200 F 212 301 4645 christopher.bowen@cmegroup.com cmegroup.com

2

Contract Title Micro Henry Hub 

Natural Gas Futures

Micro Henry Hub Natural 

Gas Option

Micro Henry Hub Natural 

Gas Friday Weekly Option

Hub Natural Gas 

Futures contract (NG).

Micro Henry Hub Natural 

Gas Futures contract (MNG).

Strike Price Listing 

Schedule

Minimum 50 strikes at 

$0.025 per MMBtu increment 

above and below the at-themoney strike then 20 strikes 

at $0.25 per MMBtu 

increment above and below 

the highest and lowest 

$0.025 per MMBtu increment 

strikes on the 25 increment 

plus dynamic strikes at 

$0.025 per MMBtu 

increment.

Minimum 50 strikes at $0.025 

per MMBtu increment above 

and below the at-the-money 

strike then 10 strikes at $0.25 

per MMBtu increment above 

and below the highest and 

lowest $0.025 per MMBtu 

increment strikes on the 0.25 

increment plus dynamic 

strikes at $0.025 per MMBtu 

increment.

Underlying Futures 

Contract / 

Commodity Code

Micro Henry Hub Natural Gas Futures / MNG

Option Exercise 

Style European

Block Trade 

Minimum Threshold 

and Reporting 

Window

500 contracts –

subject to a 15- minute 

reporting window

100 contracts – subject to a 15-minute reporting window

Trading and Clearing 

Hours

CME Globex Pre-open: Sunday 4:00 p.m. - 5:00 p.m. Central Time/CT

Monday – Thursday 4:45 p.m. - 5:00 p.m. CT

CME Globex: Sunday 5:00 p.m. - Friday 4:00 p.m. CT with a daily maintenance period 

from 4:00 p.m. - 5:00 p.m. CT

CME ClearPort: Sunday 5:00 p.m. - Friday 4:00 p.m. CT with no reporting Monday -

Thursday from 4:00 p.m. - 5:00 p.m. CT

The new financially-settled Micro Henry Hub Natural Gas Futures contract is a referenced contract that will 

aggregate with existing Henry Hub Natural Gas Look-Alike last Day Financial Futures (Commodity Code: 

HH; Rulebook Chapter 823). The new financially-settled Micro Henry Hub Natural Gas Option and Micro 

Henry Hub Natural Gas Weekly Option contracts are referenced contracts that expire prior to the spot period 

of their underlying core referenced futures contract (Henry Hub Natural Gas Futures contract – Commodity 

Code: NG; Rulebook Chapter 220). As such, spot month position limits are not applicable for the new Micro 

Henry Hub Natural Gas Option and Micro Henry Hub Natural Gas Weekly Option contracts.

The Exchange reviewed the designated contracts market core principles (“Core Principles”) as set forth in 

the Commodity Exchange Act (“CEA” or “Act”) and identified that the Contracts may have some bearing on 

the following Core Principles:
300 Vesey Street New York, NY 10282 T 212 299 2200 F 212 301 4645 christopher.bowen@cmegroup.com cmegroup.com

3

• Compliance with Rules: Trading in the Contracts will be subject to the rules in Rulebook Chapter 

4 which includes prohibitions against fraudulent, noncompetitive, unfair and abusive practices. 

Additionally, trading in the Contracts will also be subject to the full panoply of trade practice rules, 

the majority of which are contained in Chapter 5 and Chapter 8 of the Rulebook. As with all 

products listed for trading on one of CME Group Inc.’s (“CME Group”) designated contract markets, 

activity in the new products will be subject to extensive monitoring and surveillance by CME Group’s 

Market Regulation Department. The Market Regulation Department has the authority to exercise 

its investigatory and enforcement power where potential rule violations are identified.

• Contract Not Readily Subject to Manipulation: The Contracts are not readily susceptible to 

manipulation and are based on the deep liquidity of the underlying futures contracts.

• Prevention of Market Disruption: Trading in the Contracts will be subject to the Rules of NYMEX

which include prohibitions on manipulation, price distortion and disruptions of the delivery or cashsettlement process. As with all products listed for trading on one of CME Group’s designated 

contract markets, activity in the new products will be subject to extensive monitoring and 

surveillance by CME Group’s Market Regulation Department.

• Position Limitations or Accountability: The speculative position limits for the Contracts as 

demonstrated in this submission are consistent with the Commission’s guidance.

• Availability of General Information: The Exchange will publish on its website information 

regarding contract specifications, terms and conditions, as well as daily trading volume, open 

interest and price information for the Contracts.

• Daily Publication of Trading Information: The Exchange will publish information contract trading 

volumes, open interest levels, and price information daily on its website and through quote vendors 

for the Contracts.

• Execution of Transactions: The Contracts will be listed for trading on the CME Globex electronic 

trading and for clearing through CME ClearPort. The CME Globex trading venue provides for 

competitive and open execution of transactions. CME Globex affords the benefits of reliability and 

global connectivity.

• Trade Information: All required trade information for the Contracts will be included in the audit trail 

and is sufficient for the Market Regulation Department to monitor for market abuse.

• Financial Integrity of Contract: The Contracts will be cleared by the Chicago Mercantile 

Exchange Inc. which is a registered derivatives clearing organization with the Commission and is 

subject to all Commission regulations related thereto.

• Protection of Market Participants: NYMEX Rulebook Chapters 4 and 5 contain multiple 

prohibitions precluding intermediaries from disadvantaging their customers. These rules apply to 

trading on all of the Exchange’s competitive trading venues and will be applicable to transactions 

in these Contracts.

• Disciplinary Procedures: Chapter 4 of the Rulebook contains provisions that allow the Exchange 

to discipline, suspend or expel members or market participants that violate the rules. Trading in 

these Contracts will be subject to Chapter 4, and the Market Regulation Department has the 

authority to exercise its enforcement power in the event rule violations in these Contracts are 

identified.
300 Vesey Street New York, NY 10282 T 212 299 2200 F 212 301 4645 christopher.bowen@cmegroup.com cmegroup.com

4

• Dispute Resolution: Disputes with respect to trading in the Contracts will be subject to the 

arbitration provisions set forth in Chapter 6 of the Rulebook. The rules in Chapter 6 allow all 

nonmembers to submit a claim for financial losses resulting from transactions on the Exchange to 

arbitration. A member named as a respondent in a claim submitted by a nonmember is required 

to participate in the arbitration pursuant to the rules in Chapter 6. Additionally, the Exchange 

requires that members resolve all disputes concerning transactions on the Exchange via arbitration.

Pursuant to Section 5c(c) of the Act and CFTC Regulation 40.2(a), the Exchange hereby certifies that listing 

the Contracts complies with the Act, including regulations under the Act. There were no substantive 

opposing views to the proposal.

The Exchange certifies that this submission has been concurrently posted on the CME Group website at

http://www.cmegroup.com/market-regulation/rule-filings.html.

Should you have any questions concerning the above, please contact the undersigned at (212) 299-2200 

or via e-mail at CMEGSubmissionInquiry@cmegroup.com.

Sincerely, 

/s/ Christopher Bowen

Managing Director and Chief Regulatory Counsel

Attachments: Exhibit A: NYMEX Rulebook Chapters 440, 441, and 442

Exhibit B: Position Limits, Position Accountability and Reportable Level Table in Chapter 

 5 of the NYMEX Rulebook (attached under separate cover)

Exhibit C: Exchange Fees

Exhibit D: NYMEX Rule 588.H. – (“Globex Non-Reviewable Trading Ranges”) Table

Exhibit E: NYMEX Rule 589. – Special Price Fluctuation Limits and Daily Price Limits 

Exhibit F: NYMEX Rule 300.20. – Strike Price Listing and Exercise Procedures Table 

Exhibit G: Rule 855. – Contracts Eligible for Offset Table

Exhibit H: Cash Market Overview and Analysis of Deliverable Supply
5

Exhibit A

NYMEX Rulebook

Chapter 440

Micro Henry Hub Natural Gas Futures

440100. SCOPE OF CHAPTER

The provisions of these rules shall apply to all futures contracts bought or sold on the Exchange for 

cash settlement based on the Floating Price. The procedures for trading, clearing and cash 

settlement of this contract, and any other matters not specifically covered herein shall be governed 

by the general rules of the Exchange.

440101. CONTRACT SPECIFICATIONS

The Floating Price for each contract month is equal to the Henry Hub Natural Gas Futures contract 

(commodity code: NG; Rulebook Chapter 220) final settlement price for the corresponding contract 

month on the last trading day for that contract month.

440102. TRADING SPECIFICATIONS

The number of months open for trading at a given time shall be determined by the Exchange. 

440102.A. Trading Schedule 

The hours of trading for this contract shall be determined by the Exchange. 

440102.B. Trading Unit 

The contract quantity shall be 1,000 MMBtu. Each contract shall be valued as the contract quantity 

(1,000) multiplied by the settlement price.

440102.C. Price Increments 

Prices shall be quoted in U.S. dollars and cents per MMBtu. The minimum price fluctuation shall be 

$0.001 per MMBtu. 

440102.D. Special Price Fluctuation Limits

At the commencement of each trading day, the contract shall be subject to special price fluctuation 

limits as set forth in Rule 589 and in the Special Price Fluctuation Limits and Daily Price Limits Table 

in the Interpretations & Special Notices Section of Chapter 5.

440102.E. Position Limits, Exemptions, Position Accountability and Reportable Levels 

The applicable position limits and/or accountability levels, in addition to the reportable levels, are set 

forth in the Position Limit, Position Accountability and Reportable Level Table in the Interpretations 

& Special Notices Section of Chapter 5. 

A Person seeking an exemption from position limits for bona fide commercial purposes shall apply 

to the Market Regulation Department on forms provided by the Exchange, and the Market Regulation 

Department may grant qualified exemptions in its sole discretion. Refer to Rule 559 for requirements 

concerning the aggregation of positions and allowable exemptions from the specified position limits.

440102.F. Termination of Trading

The contract shall terminate one business day prior to the expiration of the corresponding contract 

month of the Henry Hub Natural Gas Futures contract.

440103. FINAL SETTLEMENT

Final settlement under the contract shall be by cash settlement. Final settlement, following 

termination of trading for a contract month, will be based on the Floating Price. The final settlement 

price will be the Floating Price calculated for each contract month.
6

Chapter 441

Micro Henry Hub Natural Gas Option

441100. SCOPE OF CHAPTER

This chapter is limited in application to put and call options on the Micro Henry Hub Natural Gas 

Futures contract (commodity code: MNG). In addition to the rules of this chapter, transactions in the 

Micro Henry Hub Natural Gas Option contract shall be subject to the general rules of the Exchange 

insofar as applicable.

441101. OPTION CHARACTERISTICS

The number of contract months open for trading at a given time shall be determined by the Exchange.

441101.A. Trading Schedule 

The hours of trading for this contract shall be determined by the Exchange. 

441101.B. Trading Unit 

On expiration of a call option, the value will be the settlement price of the first nearby Micro Henry 

Hub Natural Gas Futures contract less the strike price, or zero, whichever is greater, multiplied by 

1000. On expiration of a put option, the value will be the strike price less the settlement price of the 

first nearby Micro Henry Hub Natural Gas Futures contract, or zero, whichever is greater, multiplied

by 1000. 

441101.C. Price Increments 

Prices shall be quoted in U.S. dollars and cents per MMBtu. The minimum price fluctuation shall be 

$0.001per MMBtu. 

441101.D. Position Limits, Exemptions, Position Accountability and Reportable Levels 

The applicable position limits and/or accountability levels, in addition to the reportable levels, are set 

forth in the Position Limit, Position Accountability and Reportable Level Table in the Interpretations 

& Special Notices Section of Chapter 5. A Person seeking an exemption from position limits for bona 

fide commercial purposes shall apply to the Market Regulation Department on forms provided by the 

Exchange, and the Market Regulation Department may grant qualified exemptions in its sole 

discretion. Refer to Rule 559 for requirements concerning the aggregation of positions and allowable 

exemptions from the specified position limits.

441101.E. Termination of Trading

A Micro Henry Hub Natural Option shall expire on the second business day immediately preceding 

the expiration of the underlying Micro Henry Hub Natural Gas Futures contract.

441101.F. Type of Option

The option is a European-style option cash settled on expiration day.

441102. EXERCISE PRICES AND CHARACTERISTICS

Transactions shall be conducted for option contracts as set forth in Rule 300.20.

441103. SPECIAL PRICE FLUCTUATION LIMITS

At the commencement of each trading day, the contract shall be subject to special fluctuation limits 

as set forth in Rule 589 and in the Special Price Fluctuation Limits and Daily Price Limits Table in the 

Interpretations & Special Notices Section of Chapter 5.
7

Chapter 442

Micro Henry Hub Natural Gas Friday Weekly Option

442100. SCOPE OF CHAPTER

This chapter is limited in application to put and call options on the Micro Henry Hub Natural Gas 

Futures contract (commodity code: MNG). In addition to the rules of this chapter, transactions in the 

Micro Henry Hub Natural Gas Friday Weekly Option contract shall be subject to the general rules of 

the Exchange insofar as applicable.

442101. OPTION CHARACTERISTICS

The number of weeks open for trading at a given time shall be determined by the Exchange.

442101.A. Trading Schedule 

The hours of trading for this contract shall be determined by the Exchange. 

442101.B. Trading Unit 

On expiration of a call option, the value will be the settlement price of the first nearby Micro Henry 

Hub Natural Gas Futures contract less the strike price, or zero, whichever is greater, multiplied by 

1000. If expiration occurs on or after the monthly option contract and on or before the first nearby 

Micro Henry Hub Natural Gas Futures expiration, the value will be the settlement price of the second 

nearby Micro Henry Hub Natural Gas Futures contract less the strike price, or zero, whichever is 

greater, multiplied by 1000.

On expiration of a put option, the value will be the strike price less the settlement price of the first 

nearby Micro Henry Hub Natural Gas Futures contract, or zero, whichever is greater, multiplied by 

1000. If expiration occurs on or after the Micro Henry Hub Natural Gas monthly option contract and 

on or before the first nearby Micro Henry Hub Natural Gas Futures expiration, the value will be the 

strike price less the settlement price of the second nearby Micro Henry Hub Natural Gas Futures 

contract, or zero, whichever is greater, multiplied by 1000.

442101.C. Price Increments 

Prices shall be quoted in U.S. dollars and cents per MMBtu. The minimum price fluctuation shall be 

$0.001per MMBtu. 

442101.D. Position Limits, Exemptions, Position Accountability and Reportable Levels 

The applicable position limits and/or accountability levels, in addition to the reportable levels, are set 

forth in the Position Limit, Position Accountability and Reportable Level Table in the Interpretations 

& Special Notices Section of Chapter 5.A Person seeking an exemption from position limits for bona 

fide commercial purposes shall apply to the Market Regulation Department on forms provided by the 

Exchange, and the Market Regulation Department may grant qualified exemptions in its sole 

discretion. Refer to Rule 559 for requirements concerning the aggregation of positions and allowable 

exemptions from the specified position limits.

442101.E. Termination of Trading

Options will expire at the close of trading on a Friday schedule.

If such Friday is an Exchange holiday, the contract shall terminate on the first business day 

immediately preceding the Friday. 

442101.F. Type of Option

The option is a European-style option cash settled on expiration day.

442102. EXERCISE PRICES AND CHARACTERISTICS

Transactions shall be conducted for option contracts as set forth in Rule 300.20.

442103. SPECIAL PRICE FLUCTUATION LIMITS

At the commencement of each trading day, the contract shall be subject to special fluctuation limits 

as set forth in Rule 589 and in the Special Price Fluctuation Limits and Daily Price Limits Table in the 

Interpretations & Special Notices Section of Chapter 5.
8

Exhibit B

NYMEX Rulebook

Chapter 5

(“Trading Qualifications and Practices”)

Position Limits, Position Accountability and Reportable Level Table 

(attached under separate cover)
9

Exhibit C

Exchange Fees

• Micro Natural Gas Futures (MNG)

Member Non-Member

CME Globex $0.30 $0.60

EFP $0.35 $0.65

Block $0.35 $0.65

EFR/EOO $0.35 $0.65

Processing Fees Member Non-Member

Cash Settlement $0.30 $0.60

Facilitation Fee $0.06

Give-Up Surcharge $0.05

Position Adjustment/Position 

Transfer/Fungibility $0.10

• Micro Henry Hub Natural Gas Option (MNO)

• Micro Henry Hub Natural Gas Friday Weekly Option (MN1, MN2, MN3, MN4, MN5)

Member Non-Member

CME Globex $0.35 $0.75

Block $0.70 $1.00

EFR/EOO $0.70 $1.00

Processing Fees Member Non-Member

Cash Settlement $0.35 $0.75

Facilitation Fee $0.06

Give-Up Surcharge $0.05

Position Adjustment/Position Transfer $0.10
10

Exhibit D

NYMEX Rulebook

Chapter 5

(“Trading Qualifications and Practices”)

Rule 588.H. (“Globex Non-Reviewable Trading Ranges”) Table
11

Exhibit E

NYMEX Rulebook

Chapter 5

(“Trading Qualifications and Practices”)

Rule 589. Special Price Fluctuation Limits and Daily Price Limits Table
12

Exhibit F

NYMEX Rulebook

Chapter 300

(“Options Contracts”)

Rule 300.20.- Strike Price Listing and Exercise Procedure Table
13

Exhibit G

Rule 855. – Contracts Eligible for Offset Table
14

Exhibit H

Cash Market Overview and Analysis of Deliverable Supply

In estimating deliverable supply for the Henry Hub Natural Gas Futures, the New York 

Mercantile Exchange, Inc. (“NYMEX” or “Exchange”) relied on long-standing precedent, which 

provides that the key component in estimating deliverable supply is the portion of typical

production and supply stocks that could reasonably be considered to be readily available for 

delivery. In its guidance on estimating deliverable supply, the Commodity Futures Trading 

Commission (“CFTC” or “Commission”) states:

In general, the term “deliverable supply” means the quantity of the commodity 

meeting a derivative contract’s delivery specifications that can reasonably be 

expected to be readily available to short traders and saleable by long traders 

at its market value in normal cash marketing channels at the derivative

contract’s delivery points during the specified delivery period, barring abnormal 

movement in interstate commerce. Typically, deliverable supply reflects the 

quantity of the commodity that potentially could be made available for sale on 

a spot basis at current prices at the contract’s delivery points. For a nonfinancial physical- delivery commodity contract, this estimate might represent 

product which is in storage at the delivery point(s) specified in the futures 

contract or can be moved economically intoor through such points consistent 

with the delivery procedures set forth in the contract and which is available for 

sale on a spot basis within the marketing channels that normally are tributary 

to the delivery point(s).1

I. Methodology and Data Sources

The Exchange considered four factors in evaluating the Henry Hub natural gas deliverable 

supply estimates:

(1) Geographic extent of the market;

(2) Natural gas production that can flow to the delivery location;

(3) Delivery capacity of the delivery mechanism; and

(4) Storage information.

A. Geographic Extent of the Market

The geographic extent of the market defines both the sources from which supplies can be readily

provided as well as the destinations into which supply can be re-delivered. The Henry Hub 

delivery mechanism is part of a broader geographic market that encompasses U.S. Gulf Coast

(USGC) area production, sales and re-sales. This includes production from Texas, Louisiana, 

Mississippi and Alabama, USGC area storage and USGC area pipelines and supporting

facilities.

B. Natural Gas Production

To determine production estimates, NYMEX reviewed information gathered from two sources: 

Bentek, a wholly owned subsidiary of Platts and the U.S. Department of Energy (“DOE”) Energy 

Information Administration (“EIA”).

Bentek is an industry leader in the provision of data aggregation and collation from the Interstate 

Natural Gas Pipelines’ electronic bulletin boards.2 Interstate natural gas pipelines are subject to 

Federal Energy Regulatory Commission (“FERC”) oversight and jurisdiction. As part of its 

regulatory oversight, FERC

1 http://www.ecfr.gov/cgi-bin/text-idx?SID=74959c3dbae469e2efe0a42b45b8dfae&mc=true&node=ap17.1.38_11201.c&rgn=div9
15

2 Bentek collects details on the flow of interstate pipeline natural gas from the production source, commonly known as 

the wellhead, to the local distribution company’s (including municipal operated distributors) delivery point, commonly

known as its city-gate, beyond which point the pipeline ceases to be a federally regulated interstate pipeline.
16

requires interstate pipelines to operate publicly accessible electronic bulletin boards which provide 

information on scheduling, available capacity and natural gas flows on a near real-time basis. Among other 

things, Bentek collects and disseminates collated data from these electronic bulletin boards daily. Given 

this, the Bentek data presented can be more current than the EIA data, which are typically subject to a 

minimum two-month delay in publication.

EIA data are a definitive source for production information and EIA does provide marketed production data 

for Federal U.S. Gulf Coast offshore production as well as onshore production for individual states such as 

Louisiana and Texas; these data include, however, some onshore production that would not be able to 

readily access the delivery point.

Bentek provides greater geographic detail than the EIA data by providing both U.S. Gulf Coast offshore and 

onshore natural gas production that has ready access to the delivery point. As is discussed below, NYMEX 

believes that the Bentek data underestimates the total production with ready access to the Henry Hub but, 

nonetheless, represents a reasonable basis for production estimates.

C. Henry Hub Operating Capacity

The source of the Henry Hub pipeline receipt and delivery capacity is the Sabine Pipe Line Co. website. As 

part of FERC regulation, interstate pipelines are required to provide daily capacity information that includes 

receipt and delivery design, scheduled and available for all certificated interconnections.3 The natural gas

daily deliveries operating capacity is 3,535,000 Dth which is equivalent to 3,535,000 MMBtu.

D. State of Louisiana and Producing Area Natural Gas Storage

Storage data are provided on a weekly basis by EIA and are approximately four business days old upon 

release. These data are provided by general region—East, West and Producing. Producing includes the

U.S. Gulf Coast region which includes the delivery location for the Henry Hub Natural Gas Futures contract. 

The EIA also collects data at the individual state level but provides these data with a time lag of 

approximately six months. At these frequencies of release, there are no official storage data with greater 

geographic detail than either the Producing region or state level.

II. The Henry Hub Physical Delivery Mechanism

The Henry Hub consists of interconnections with 11 interstate and intrastate pipelines and related 

infrastructure. The Henry Hub is owned and operated by EnLink Midstream. The deliveries pipelines source 

their natural gas from the U.S. Gulf Coast region, both onshore and offshore, which extends from Texas to 

Alabama. Henry Hub has two compressor stations that enable natural gas to move from lower pressure

pipeline Henry Hub receipt interconnections to higher pressure downstream Henry Hub pipelines.

Henry Hub also offers an intra-Hub tracking and transfer service, a form of in-system title transfer and 

documentation, to accommodate trading and delivery needs of its customers. This service, which is offered 

by Sabine Hub Services Company, a non-federal jurisdictional subsidiary of EnLink Midstream, enhances 

the natural gas trading environment for producers, marketers, and end-users with respect to meeting their 

physical and financial requirements. In addition, the number of interruptible transportation customers of 

Henry Hub has grown to approximately 160 market participants.

III. Physical Market Trading Structure and Term Contracts

A. Physical Market Trading Structure

Typically, there is a chronology of sales and purchases of natural gas in the U.S. market that starts with a 

sale from producer and finishes with a purchase by an end-user to consume the natural gas, typically far 

downstream of the U.S. Gulf Coast. First-sales are from producers to marketers or other middleman-type 

firms with delivery at the production point or where natural gas first enters the pipeline system (or liquids

3 http://www.sabinepipeline.com//.
17

processing facility attached to the system). The first-sale buyer transports it from the point of sale 

downstream. Typically, the first-sale buyer resells the natural gas to someone other than the end-user. 

Sales to end-users, who do not further resell the natural gas but ultimately consume it, are final-sales.

As implied, sometimes end-users also resell natural gas, frequently during the same commercial cycle in 

which they purchased it. Other buyers of resold natural gas also either resell it or store it and resell it later. 

A common commercial practice is the first-sale and multiple subsequent re-sales occurring in the same 

delivery cycle; this line of re-sales usually includes a final sale, but not always, since a significant portion of 

natural gas is stored.

Henry Hub is essentially an active reseller market where buyers either: resell the natural gas to someone 

else at Henry Hub; transport it downstream for delivery and re-sale to someone else; transport it 

downstream to consume it; or transport it downstream to store it. Most of the sales and deliveries in the 

Henry Hub are comprised of volumes for re-sale, storage or final-sales. In fact, the commercial physical 

market in Henry Hub sales is estimated to be 7-8 times the multiple of physical natural gas that flows 

through Henry Hub, which is a direct indication that most sales are for re-sale. Platts Gas Daily and Inside

F.E.R.C. publish transaction information for delivery at Henry Hub but do not capture all transactions that 

occur at the Henry Hub.

B. Term Contracts

The Exchange contacted and surveyed natural gas market participants regarding common commercial 

practices, including the use of term contracts, in the North American natural gas market.4 The responses 

we received were consistent and can be summarized as follows:

• Most first-sales of production are sold term, as indicated above, typically for delivery on the 

producing property or nearest entry to the pipeline system, including liquids processing plants, and 

typically to middleman-firms. These middleman-firms typically resell the natural gas to other 

middleman-firms or to market participants performing that function or to end-users. Gulf Coast 

market participants estimated re-sales ranging from 50% to over 90%—skewing towards the higher 

end. Some market participants indicated they did not know of exceptions but did not estimate 100% 

of first sales to be ultimately resold.

• No restrictions typically apply to the resale of natural gas bought first-sale on a term basis from 

producers. In fact, restrictions would clearly not be applicable because sales are typically to 

marketers or others acting in a middleman-firm role with the expressed responsibility of reselling 

the natural gas. The participants with whom we spoke indicated that they had not encountered any 

restrictions. Several market participants did point out that “burner-tip” sales—i.e., to utilities—could 

entail a restriction on the utility from reselling the natural gas; however, they made clear that such 

sales, in their experience, were downstream of first-sales and first re-sales as well, especially in 

the U.S. Gulf Coast.

• Henry Hub is largely downstream of first-sales; some first-sales take place there but, typically, not 

as part of a term sale. Consequently, natural gas production that is readily accessible to Henry Hub 

in terms of transportation is also readily accessible commercially. Natural gas that has readily 

accessible transportation to Henry Hub is not otherwise committed and unavailable to be delivered 

at Henry Hub.

• Term sales do not result in reductions to the deliverable supply for Henry Hub. All market 

participants agreed that natural gas purchased on a term sale is available for re-sale and delivery, 

including to the Henry Hub and that all market participants downstream of first-sales participate in 

the market for resale (as some first-sellers do).

• Our sources expressly advised us that any production sold long-term was available for re-sale, 

which is especially the case in the U.S. Gulf Coast market and the Henry Hub.

4 The Exchange contacted in the past 15 firms, surveying 10, as well as a market participant group that included several dozen 

members. The individually contacted firms included major producers and marketers. The Energy Market Participant Group was 
18

organized through Hunton & Williams LLP to discuss and comment on regulatory issues. The Exchange does not believe that this 

trend has changed. 

IV. Deliverable Supply Estimates and Supporting Data

The factors considered in evaluating deliverable supply are natural gas production, deliverable capacity at 

the Henry Hub, and natural gas storage.

A. Natural Gas Production

The Exchange reviewed monthly data reported by EIA for Federal Offshore – Gulf of Mexico Natural Gas

Marketed Production (Table 1 below) from January 2020 through December 2022. The monthly average 

offshore natural gas production was approximately 6,577 contract equivalents in 2020, 6,422 contract

equivalents in 2021 and 6,440 contract equivalents in 2022 (contract size: 10,000 MMbtu). Federal Offshore 

production is a subset of production that is readily accessible to be delivered at the Henry Hub.

The Exchange also reviewed monthly data reported by EIA for Louisiana Natural Gas Marketed Production 

(Table 2 below) and Texas Natural Gas Marketed Production (Table 3 below) from January 2020 through

December 2022. The monthly average onshore production for Louisiana was approximately 26,718 contract

equivalents from in 2020, 28,595 contract equivalents in 2021 and 33,496 contract equivalents in 2022. The

monthly average onshore production for Texas was approximately 77,801 contract equivalents in 2020, 82,295 

contract equivalents in 2021, and 87,351 contract equivalents in 2022. 

However, the onshore Louisiana and Texas production data includes production from certain regions of the 

states that would not be readily accessible to the Henry Hub. Consequently, even though EIA is the preeminent official source for production data, the Exchange relied on production estimates reported by Bentek

which captures data for specific offshore and onshore areas that are accessible to the Henry Hub.

Table 5 provides Bentek’s estimates of daily natural gas production accessible to the Henry Hub for Onshore 

and Offshore Louisiana, Texas, Mississippi and Alabama in million cubic feet for the period beginning 

January 2020 through December 2022. According to Bentek, average monthly onshore production 

accessible to the Henry Hub for was approximately 7,860 contract equivalents in 2020, 6,723 contracts 

equivalents in 2021, and 7,737 contract equivalents in 2022, respectively. Average offshore production 

accessible to the Henry Hub for period was approximately 9,240 contract equivalents in 2020, 7,854 

contracts equivalents in 2021, and 7,179 contract equivalents in 2022, respectively. Additionally, as 

illustrated in Table 6 below, average offshore natural gas production accessible to the Henry Hub as

estimated by Bentek yielded totals that were comparable to EIA’s average of Federal offshore production. It 

should be noted that Bentek’s offshore production data includes state offshore production that is directed to

the Interstate pipeline system.

Total annual average of onshore and offshore production as estimated by Bentek, is approximately 17,100 

contract equivalents in 2020, 14,577 in 2021, and 14,916 contracts equivalents in in 2022.

The Exchange monitors production regularly and, in light of the continued production in the Gulf Coast region 

and other areas, anticipates the continuing central role provided by the Henry Hub as a delivery mechanism 

for natural gas. The production quantities included in these estimates represent production that is tendered 

in the secondary (or spot) market and which could easily access the Henry Hub delivery mechanism to

dependably fulfill a secondary (or spot) market delivery at the Henry Hub. The actual delivery path for 

production depends on the actual commercial activity each month in the secondary market, including delivery

obligations for NYMEX natural gas contracts. There are multiple delivery points (including the Henry Hub) 

where such secondary market deliveries can take place for this production and the actual delivery locations 

for specific production each month fluctuates with its corresponding secondary market transactions.
19

B. Henry Hub Deliverable Capacity

US Gulf Coast (“USGC”) has undergone major changes in the last few years due to supply growth and the 

expansion of pipeline takeaway capacity. USGC has been a major production basin where natural gas is 

produced and processed then shipped to major demand center in Northeast, Midwest and Southeast via 

long-haul pipelines including the ones interconnected to the hub. Texas and Louisiana remain the top 

producing states with a share of approximately 35.5 % of the total U.S. natural gas production. However, the 

shale revolution has redefined the supply structure and Northeast is becoming a net exporter area displacing 

excess gas to the other markets notably USGC. Also, the region infrastructure is continuously growing. New 

concentration of facilities throughout the gas supply chain, including gathering and processing plants, 

extensive pipeline system, storage, industrial access, and LNG terminals have emerged. Henry Hub is an 

integral part of this infrastructure network.

In addition, USGC is undergoing a fundamental shift and becoming a major consumption destination 

specifically with LNG export terminals for example Sabine Pass LNG, Corpus Christi LNG, Cameron LNG, 

and Freeport LNG. U.S. began exporting LNG in February 2016. In July 2022, U.S. has the world largest 

LNG export capacity.

5

Historically, the Exchange has utilized transfer services capacity as defined in a 2014 Form 10-K filing by 

EnLink Midstream. This number has never been updated or published since. After evaluating the new 

structural changes which center around the expanded capacity and infrastructure mentioned above the 

Exchange decided to speak with EnLink Midstream. 

In our conversation with EnLink Midstream, it was determined that the design capacity which measures the 

operationally available capacity, is an adequate and commercially accepted measure to estimate the delivery 

capacity. Based on FERC Order No. 637,

6

issued on February 25, 2000, as amended in several subsequent 

orders, promulgated rules requiring interstate pipelines to publish various information including design and 

operationally available capacity on their public Electronic Bulletin Boards (EBBs). The delivery design and 

operationally available capacity for all interconnects is public information that is available on Sabine Pipe

Line LLC website.

7 The daily deliveries design capacity at Henry Hub from its interconnects is 3,535,000 

MMBtu which converts into 354 contracts per day and 10,605 contracts per month. While there may not be 

known constraints on being able to run at 100% design capacity, there is a potential that running at full 

capacity for extended periods of time may cause systematic issues. Therefore, the Exchange decided to 

look at haircut based on capacity utilization in the natural gas industry. The US Federal Reserve System 

estimates capacity utilization to be around 81% from 1967 to May of 2023 and 80% over the past 3 years.8 

Based on these numbers and in an effort to act conservatively and prudently, the Exchanges decided to 

haircut the design capacity of 10,605 contracts by an amount of 25%. In its conversations with market 

participants, firms expressed the view that a 25% haircut of design capacity was conservative. While the 

view was expressed that hub design capacity need not be haircut, firms agreed that applying a 25% haircut 

would be a conservative approach.

Additionally, the Exchange has taken into consideration backhaul in estimating the deliverable supply. 

Displacement or backhaul refers to gas flows that are scheduled in the opposite direction of existing 

scheduled flow in a pipeline, at a storage facility or at a Hub that accommodates delivery such as the Henry 

Hub. Displacement is a standard component of transportation services provided under FERC Gas Tariff9 of 

Sabine Pipe Line in accordance with FERC regulations. This mechanism is integral to the network and 

considered as a common practice in pipeline operations.

Displacement can occur at any interconnect or point(s) on a natural gas pipeline system when volumes 

nominated and scheduled to flow in one direction are displaced by volumes nominated and scheduled to 

flow in the opposite direction. It is important to note that all confirmed nominations are viewed as flowing gas 

but only the net result of scheduled nominations flowing opposite directions at the same point will actually

physically flow. The remaining volumes not displaced will determine the direction of actual physical flow 

5 https://www.eia.gov/todayinenergy/detail.php?id=53719

6 https://www.ferc.gov/sites/default/files/2020-05/rm98-10.pdf

7 http://www.gasnom.com/ip/sabine/ipindex.cfm

8 https://fred.stlouisfed.org/series/CAPUTLG2212S

9 http://www.gasnom.com/ip/sabine/fileviewer.cfm?FromLoc=Tariff&file=tariff.pdf
20

through the inlet and outlet meters at the Henry Hub. Additionally, backhaul is coordinated directly by 

interconnecting pipeline operators as a natural consequence of scheduled nominations between the two, 

without any special distinction or notification to shippers. Also, the Exchange has confirmed with the pipeline 

operator that incorporating displacement is both reasonable and appropriate.

In evaluating delivery capacity, the Exchange calculated the average monthly backhaul deliveries and 

receipts for all interconnects based on Design and Available capacities data provided by EnLink Midstream 

from, March 2020 to February, 2023. Given that the inflowing natural gas receipts capacity is greater than 

the outflowing natural gas deliveries capacity, the Exchange determined at this time to use the outflowing 

natural gas deliveries capacity, which is the lower of the two numbers, in its evaluation of deliverable supply. 

Based on the methodology described above, the Exchange estimated the backhaul capacity at the Henry 

Hub based on the following approach:

The Exchange first calculated the monthly backhaul capacity at every interconnect for each month based on 

all daily observations.

The Exchange summed up the largest monthly backhaul capacity at every interconnect over each 12-month 

interval over the 3-year timeframe. Accordingly, the total is 14,112,822 MMBtu for the March 2020 to

February 2021 period, 7,356,760 MMBtu for the March 2021 to February 2022 period, and 6,349,994 MMBtu

for the March 2022 to February 2023 period. 

The average of three calculated values are 9,273,192 MMBti which is equivalent to 927 contractsper month 

as illustrated in Table 7.

The monthly backhauling increased from 9,513,024 MMBtu in 2019 to 14,403,980 MMBtu in 2020 then 

decreased to 7,290,679 MMBtu in 2021.Monthly backhaul is not consistently in decline nor does it suggest 

a structural market shift; rather, the monthly displacement varies year over year and can be impacted by 

anomalous weather events such as Winter Storm Uri in 2021. The volume of natural gas in-flows and 

counter-flows (backhaul) are a function of the market dynamics. These flows fluctuate over time in response 

to demand variations that are typically driven by changes in loads which are well managed by the hub 

operator. 

Winter Storm Uri which affected most of North America and brought severe destructive weather to the gas 

producing Southeastern states including Texas, Louisiana, and Oklahoma. According to National Oceanic 

and Atmospheric Administration (NOAA), Winter Storm Uri caused the coldest temperatures in more than 

30 years and power outages for nearly 10 million people. The storm was characterized by the National 

Weather Service as “was one of the most impactful winter events in recent history that brought multiday road 

closures, power outages, loss of heat, broken pipes, and other societal impacts for the region.” Texas 

particularity suffered the worst since the event triggered massive failures power generation, transportation, 

and water systems leaving millions of Texans without electricity, heat, and water, many for several days.

This resulted in the curtailment of natural gas production and well freeze offs in the affected area. EnLink 

Midstream which owns and operates Henry Hub stated in their press release for the first Quarter 2021 

earnings that “Winter Storm Uri temporarily impacted volumes across EnLink's asset footprint giving rise to 

commercial challenges offset by operational savings.” And added that “All systems have resumed normal 

operations and suffered no lasting integrity impact.”10

10 https://investors.enlink.com/news-events/press-releases/detail/35/enlink-midstream-reports-first-quarter-2021-results-and
21

C. Natural Gas Storage in State of Louisiana and Producing Area

The Exchange reviewed monthly data reported by EIA for Louisiana Natural Gas Underground Storage 

Volume (Table 4 below) from January 2020 through December 2022. The monthly average for storage for 

Louisiana and producing regions (Alabama, Arkansas, Kansas, Louisiana, Mississippi, Oklahoma, and 

Texas) for was approximately 63,402 contract equivalents, and 56,238 contract equivalents for the 2020–

2021 period and 52,278 contract equivalents in 2022.

D. Seasonality

The Exchange continuously monitors the deliverable supply and the delivery requirements on the Contract. 

Further, the Exchange closely monitors seasonality and to the extent that the Exchange anticipates that 25 

percent of any contract month’s deliverable supply would fall below the current spot month limit, the 

Exchange would make a good faith effort to resolve conditions potentially limiting the adequacy of the 

deliverable supply or evaluate whether there is a need to adjust the spot-month position limit for that 

corresponding contract month.

E. Deliverable Supply Estimates

Given that production and storage levels exceed deliverable capacity, as noted above, deliverable capacity 

continues to be the constraining factor in estimating deliverable supply.

Position limits of the new Micro Henry Hub Natural Gas Futures contract will aggregate into the Henry Hub 

Natural Gas Look-Alike Last Day Financial Futures contract (Rulebook Chapter 823; Commodity Code: HH). 

Based on the above analysis and as shown in Table 7, the deliverable supply is estimated solely on capacity

and average monthly backhaul capacity at the Henry Hub (7,954+ 927) contracts per month which is equal 

to 8,881 contracts per month. Twenty-five percent (25%) of the estimated monthly deliverable supply is 

2,220. The Exchange and federal spot month position limit for the Henry Hub Natural Gas Futures contract 

is 2,000 contracts. 
22

Table 1

Federal Offshore--Gulf of Mexico Natural Gas Marketed Production 

(Contract Equivalents)11

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Average

2020 8,607 8,111 8,796 8,057 6,437 6,223 6,778 4,399 4,890 3,870 6,050 6,709 6,577

2021 6,839 6,233 7,287 6,970 6,764 6,778 7,049 6,105 3,550 6,112 6,564 6,808 6,422

2022 6,545 5,588 6,355 6,581 6,233 6,363 6,639 6,828 6,659 6,735 6,392 6,366 6,445

Table 2

Louisiana Natural Gas Marketed Production 

(Contract Equivalents)12

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Avera

ge 

2020 27,476 25,589 27,654 26,487 28,164 26,407 26,488 26,023 25,569 26,312 26,731 27,718 26,718

2021 27,687 22,327 28,267 27,364 28,358 27,614 29,994 29,278 29,061 30,774 31,036 31,382 28,595

2022 31,179 28,418 31,323 31,323 34,036 33,529 34,565 35,545 34,648 36,349 35,473 35,567 33,496

Table 3

Texas Natural Gas Marketed Production 

(Contract Equivalents)13

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Avera

ge

2020 84,343 78,309 84,135 78,328 73,418 74,140 77,585 78,244 75,525 77,372 75,156 77,056 77,801

2021 79,843 60,976 82,638 82,057 84,472 81,595 85,853 86,351 85,543 87,348 83,610 87,254 82,295

2022 85,321 76,644 87,196 85,676 88,747 86,282 88,792 89,740 88,298 91,531 88,513 91496 87,353

 

11 https://www.eia.gov/dnav/ng/hist/n9050fx2M.htm

12 http://www.eia.gov/dnav/ng/hist/n9050la2m.htm

13 http://www.eia.gov/dnav/ng/hist/n9050tx2m.htm
23

Table 4

Louisiana Natural Gas Underground Storage 

Volume (Contract Equivalents)14

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2020 58,173 52,788 55,351 60,522 63,883 66,213 65,649 67,210 68,769 68,197 69,188 64,880

2021 58,785 49,718 52,238 52,997 56,404 56,677 55,135 54,485 57,245 61,488 60,234 59,445

2022 49,134 42,253 43,262 48,621 52,394 54,224 53,107 52,579 54,580 59,604 60,973 56,611

Table 5

US Gulf Natural Gas Production Accessible to Henry Hub (Million Cubic Feet per Day)

14 https://www.eia.gov/dnav/ng/hist/n5030la2m.htm

Available 

LA/TX/MS/AL 

Natural Gas 

Supply 

2020 2021 2022

Bentek LA 

Offshore YTD 1,819 1,359 1,234

Bentek LA 

Onshore YTD 293 433 617

Bentek TX 

Offshore YTD 162 127 130

Bentek TX 

Onshore YTD 2,203 1,705 1,871

Bentek MS 

Offshore YTD 617 611 552

Bentek AL 

Offshore YTD 482 521 477

Bentek AL-MSFL Onshore YTD 124 103 91

Total Bentek 

LA, TX, MS/AL 5,700 4,859 4,972

Daily Contract 

Equivalent (CE) 570 486 497

30-Day Month 

CE 17,100 14,577 14,916

25% of 30-Day 

Month CE 4,275 3,644 3,729

Available 

Natural Gas 

Supply 

2020 2021 2022

Total Bentek 

Offshore LA, TX, 

MS/AL 

3,080 2,618 2,393

Daily Contract 

Equivalent (CE) 308 261.8 239
24

Table 6

Monthly Average Offshore Production Accessible to Henry Hub 

Estimated by Bentek vs. EIA Monthly Average of Federal Offshore 

Production

(In Contract Equivalents)

Year Bentek EIA

2020 9,240 6,387

2021 7,854 6,422

2022 7,854 6,445

Table 7 Deliverable Supply Estimates

Design Capacity (with 25% 

Haircut) 2,651,250

Monthly Backhaul 9,273,192

Capacity Daily Contract 

Equivalent 265

Capacity Monthly Contract 

Equivalent 7,954

Monthly Backhaul-Contract 

Equivalent 927

DS: Capacity+Backhaul 

Contract Equivalent 8,881

25% Threshold 2220

% of current Limit 22.5%

30-Day Month 

CE 9,240 7,854 7,179

Available 

Natural Gas 

Supply 

2020 2021 2022

Total Bentek 

Onshore LA, TX, 

MS/AL 

2,620 2,241 2,579

Daily Contract 

Equivalent (CE) 262 224 258

30-Day Month 

CE 7,860 6,723 7,737