National Balancing Point (UK)
The National Balancing Point, commonly referred to as the NBP, is a virtual trading location for the sale and purchase and exchange of UK natural gas. It is the pricing and delivery point for the ICE Futures Europe (IntercontinentalExchange) natural gas futures contract. It is the 2nd most liquid gas trading point in Europe and is a major influence on the price that domestic consumers pay for their gas at home . Gas at the NBP trades in pence per therm. It is similar in concept to the Henry Hub in the United States – but differs in  that it is not an actual physical location. Balance. Unlike continental European trading hubs such as Zeebrugge and TTF, trades made at the NBP are not required to be balanced, and there is no fixed penalty for being out of balance. Instead, shippers out of balance at the end of the day are automatically balanced through the 'cash-out' procedure whereby the shipper is automatically made to buy or sell the required quantity of gas to balance their position at the marginal system buy or sell price for that day. This cash out process is not considered to be a  penalty in the same way as those imposed on shippers in continental markets, because the cash-out prices are often very close to the spot price. As a result of this daily market liquidity, the UK's NBP is frequently used to balance a shipper's position on the continent by way of the Bacton – Zeebrugge interconnector. National Grid plc. National Grid plc is the network operator (transmission system operator) in Great Britain. National Grid is responsible for the physical transportation of gas, as shippers are required only to nominate quantities entering and/or exiting the network, and not the transport  route which the gas should physically follow. National Grid has the power to bring the system into balance, if shippers as a whole are out of balance. This is achieved by trading on the OCM (see below) and passing the cost onto gas shippers through the cash-out system. When the system is short of gas it tends to force prices at the NBP up. When the system is long gas, the price is forced down. This can provide an advantageous trading environment to a shipper which has flexible flow contracts. OCM trading system. Trades at the NBP are made  via the OCM trading system, an anonymous trading service managed by ICE ENDEX to which offers or requests for gas at a nominated price can be posted. The minimum amount of gas that may be traded on the OCM is 4,000 therms, so if a shipper's position is long or short by a volume less than 4,000 therms they may be forced simply to leave their balance to cash out.