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# **Box 3 Market Center and Hub Services**

|_Market centers_and market hubs offer a large variety of services. These are the most commonly used ones:|
|---|
|Wheeling--Essentially a transportation service in which gas is transferred from one interconnected pipeline to<br>another through a header (hub), by displacement (including exchanges), or by physical transmission over a market<br>center pipeline.|
|Parking-A short-term transaction in which the market center holds the shipper's gas for redelivery at a later date.<br>Often uses storage facilities, but may also use displacement or variations in line pack.|
|Loaning-A short-term advance of gas to a shipper by a market center that is repaid in kind by the shipper a short<br>time later. Also referred to as advancing, drafting, reverse parking, and imbalance resolution.|
|Storage-Storage that is longer than parking, such as seasonal storage. Injection and withdrawal operations may be<br>separately charged.|
|Peaking-Short-term (usually less than a day and perhaps hourly) sales of gas to meet unanticipated increases in<br>demand or shortages of gas experienced by the buyer.|
|**Balancing-A**short-term interruptible arrangemen**t**o cover a temporary imbalance. The service is often provided<br>in conjunction with parking and loaning.|
|**Gas**sales-Sales of gas that are used mainly to satisfy the customer's anticipated load requirements or sales<br>obligations to others. Gas sales are also listed as a service for any market center that is a transaction point for|
|electronic gas trading.|
|<br>Title transfer-A service in which changes in ownership of a specific gas package are recorded by the market<br>center. Title may transfer several times for some gas before it leaves the center. The service is merely an accounting<br>or documentation of title transfers that may be done electronically, by hard copy, or both.|
|**Electronic**trading-Trading systems that either electronically match buyers with sellers or faciihate direct|
|negotiation for legally binding transactions. A market center or other transaction point serves as the location where|
|gas is transferred from buyer to seller. Customers may connect with the hub electronically to enter gas nominations,<br>examine their account position, and access e-mail and bulletin board services.|
|**Adminiistration-Assistance**<br>to shippers in the administrative aspects of gas transfers, such as nominations and<br>confirmations.|
|Compression-Provision of compression as a separate service. If compression is bundled with transportation, it is<br>not a separate service.|
|<br>**Risk**management-Services that relate to reducing the risk of price changes to gas buyers and sellers-<br>for<br>example, exchange of futures for physicals.|
|<br>**Hub-to-hub**transfers-Arranging simultaneous receipt of a customer's gas into a connection associated with one<br>center and an instantaneous delivery at a distant connection associated with another center. A form of "exchange"<br>transaction.|

_Source:_ U.S. Department of Energy, Energy Information Administration.

The first hub in the United States, the Henry Hub, was established in May 1988 in Erath, Louisiana (box 4). Since then, more than 50 hubs have been created across the United States. The largest hubs are the Henry Hub and the Katy Hub, in Texas. There are also about 32 market centers operating in the United States, most located at large hubs in Texas and Louisiana. One of the most important market centers in consuming regions is the Ellisburg-Leidy Center in Pennsylvania (U.S. Department of Energy 1996).