It has access to 17 pipelines, multiple and growing Midcontinent gas shale plays, and flexible storage capacity with more to come. Some say Perryville Hub in North Louisiana is the “hub of the future” and will someday overshadow Henry Hub, the South Louisiana home of the New York Mercantile Exchange (Nymex) futures contract.

Perryville’s future is so bright that energy and agricultural commodities trader The Gavilon Group LLC’s vice president for natural gas told a Houston audience Tuesday that Nymex should consider making it the “Henry Hub.”

It’s “unbelievable the pipeline infrastructure that exists today there. And honestly…the only thing missing is getting the storage to tie these pieces back together. As you look at that area, you look at gas supplies, probably by the year 2011-2012 we’ll have 14 Bcf/d flowing through Perryville. You’ve got major access to four or five of the shale areas,” Gavilon’s William Maxwell enthused at Argus Media’s conference on Perryville and the gas shale plays.

Cardinal Gas Storage, which was a major sponsor of the Argus conference, has three storage projects — called Arcadia, Perryville and Cadeville — in development in the Perryville region. “Although the forward curves today don’t necessarily indicate that there’s a lot of volatility out there, we still think that’s going to be a part of what’s going to drive the need for storage, especially when you have the tremendous amount of volumes that are going to be showing up at Perryville that you’re hearing about today,” said Kevin Holder, Cardinal vice president of business development.

Maxwell’s comparison of Perryville in Morehouse Parish with Henry in the town of Erath, LA, makes the latter sound like a poor relation. To wit:

And industry players are well aware of the party at Perryville. “You’ve got major market participants as you’ve got the marketers, you’ve got the LDCs, the electric generators, and also you can’t forget the producers,” Maxwell said. “The producing community, they’re the ones that hold the bulk of the capacity so producers are definitely big.”

One of the main arteries out of Perryville is the Southeast Supply Header (SESH), a joint venture of CenterPoint Energy and Spectra Energy, which was constructed to serve market pull from power generators and others in Florida that were looking for hurricane-free supply after Hurricane Katrina crippled the Gulf of Mexico production, noted CenterPoint’s Carol Burchfield, vice president for business development.

“That was the driver there, and you know that’s a big shift from what we see today,” Burchfield said. “Now a lot of gas showing up at Perryville is looking for additional outlets. [SESH] does have the ability for an expansion of at least 400 [MMcf] a day, so that’s something to keep in mind; as additional supplies show up at Perryville it could provide some additional outlets.”

Look for increased load factors on all of the pipelines leaving the Perryville Hub, she said.

“We really believe at CenterPoint that Haynesville, along with the other shale gas, will supplement and maybe even replace some of the traditional basins that we’ve seen filling up the pipes to the Northeast,” Burchfield said. “The Marcellus is quickly impacting how the pipes to the Northeast act, too, so I think continue to see some shifts in utilization of those pipes.”

Early last year CenterPoint secured a service mark for the name Perryville Hub; the company has 15 interconnects into the hub, Burchfield said. While Perryville only enjoys “modest” recognition in financial markets compared with Henry Hub, competition for Perryville capacity in the future is going to be “high” among producers, she said. Further, supplies at Perryville are likely to be more predictable than those at Henry, she said.

“I think with all this gas-on-gas competition we’re seeing at Perryville the downstream markets are going to be more and more important to the producers. That’s one of the areas where we feel like Perryville has an advantage over Henry. We just feel like location-wise, it has better access to those pipes to the Northeast and the Midwest.”

Rick Whitworth, Boardwalk Pipeline vice president of business development, said currently there is about 3.3 Bcf/d of available capacity from Perryville to the Northeast; however, capacity from Perryville to Transco Station 85 is full. Pipes entering Perryville from the Haynesville are “relatively full,” but pipes from the Midcontinent “have some room.”

For 2012 Whitworth projects that there will be a 4.2 Bcf/d design capacity deficit out of Perryville as capacity in will be 27.6 Bcf/d and capacity out will be 23.4 Bcf/d.

For the further development of Perryville one thing that’s needed is more diversity of market participants, Whitworth said. While producers have stepped up for plenty of capacity to get their gas to markets, they tend to do baseload deals and aren’t active in the intraday market. There’s room for a market maker to come into Perryville, he noted. For its part, Boardwalk would be willing to offer a variety of services, he said. “We’re prepared to go to the FERC right now on an experimental basis and say, ‘Hey, these are the services we could put in.'”

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