• 8 min read
Natural Gas Basis, Balancing, and Storage: How Delivered Price Is Built
Commercial natural gas pricing isn’t just the hub price. The delivered cost includes the commodity (e.g., Henry Hub), basis (difference between hub and your delivery point), transportation on pipelines, balancing for daily/seasonal mismatches, and sometimes storage. Comparing supplier quotes requires a delivered-cost lens.
Commodity + Basis
Basis reflects regional constraints and pipeline capacity. It can swing seasonally and with weather. Ask suppliers to break out basis separately to understand exposure.
Transportation & Fuel
Pipelines charge transportation and fuel retainage. Offers may include these or pass them through. Insist on clarity to avoid unexpected adders.
Balancing
Daily and monthly balancing terms manage differences between forecasts and actual consumption. Penalties can be costly—ensure tolerances are realistic for your load.
Storage
Storage smooths winter spikes. Options range from bundled storage to optional services. Evaluate whether storage value justifies costs for your profile.
How to Compare Offers
- Request a standardized pricing sheet showing commodity, basis, transportation, balancing, storage, and fees
- Evaluate delivered $/MMBtu across realistic usage scenarios
- Align term lengths to your budget cycle and seasonal needs
Related: Block-and-Index Hedging Strategies and RTO Market Timing Signals.
Keywords: natural gas basis, delivered price, balancing, storage, lower natural gas rates for businesses.