NGI Publishes Natural Gas Shale Price Index (SPI) Methodology

SPI Sample Data Available at info.naturalgasintel.com/spi

DULLES, Va.--()--Natural Gas Intelligence, a leading natural gas market publication, announced today it has published a detailed methodology for NGI’s daily natural gas price surveys of 16 North American shale and unconventional gas plays which appear every business day in NGI’s Shale Daily.

“Natural Gas Intelligence publishes multiple region-specific indices, which reflect the market-determined pricing points prevailing on Tennessee’s system.”

The Shale methodology describes the parameters used in calculating the daily Shale Price Index (SPI) of prices at 20 points in the 16 most prolific unconventional basins. The shale/unconventional basins are: the Barnett, Marcellus, Utica, Eagle Ford, Haynesville, Permian, Tuscaloosa Marine Shale, Arkoma-Woodford, Cana-Woodford, Fayetteville, Granite Wash, Green River Basin, Niobrara-DJ, Piceance, Uinta, and San Juan. There are four separate points for the largest Basin, the Marcellus, and two in the Haynesville (Download the last three months of SPIs from this page: info.naturalgasintel.com/spi.).

In calculating the shale basin prices NGI has drawn on the price information base gathered for its overall daily North American natural gas price survey of more than 100 points, published by Intelligence Press Inc. since 1993 in NGI’s Daily Gas Price Index.

The data published in the Shale Price Index (SPI) are provided voluntarily by market participants in accordance with guidance from the Federal Energy Regulatory Commission (FERC). The price surveys include day-ahead, delivered-to-pipeline spot market prices that aim to represent the price of production for each of the U.S. unconventional plays listed in the SPI table. Although they are called “Shale” Price Indices, they in fact include the prices of all gas produced or sold within or adjacent to the counties and parishes that comprise each unconventional play.

We detail the counties/parishes that make up each SPI formation in the Point-by-Point description section of the 51-page methodology accessible on the NGI website at http://www.naturalgasintel.com/ext/resources/Shale-Daily/Shale-Methodology.pdf. There also is available a methodology detailing the points reported in Daily GPI.

The pipelines and market hubs we include in calculating each individual SPI price are largely the result of an extensive analysis we conducted of nominations data reported by the various natural gas pipelines that serve the U.S., by speaking with physical market traders and pipeline representatives, and by the knowledge we have garnered over the years from determining day ahead natural gas spot market prices. Our information sources for determining the methodology also include state oil & gas commission data, individual company reports, SEC filings, and U.S. government data.

While we value continuity and attempt to maintain the parameters in the methodology, we will change them as necessary as the various unconventional plays we cover continue to evolve, in order to ensure our SPI prices remain representative. For example, since we debuted the SPI table in October 2010, we have reassigned Dominion North Point and Tennessee 313 Pool trades from our “Marcellus NE PA – Other” to our “Utica” Shale index, since the counties in Northwest Pennsylvania now seem to be more commercial for the Utica than the Marcellus.

Recently, Tennessee Gas Pipeline effectively endorsed NGI’s daily indexes by adopting, with FERC approval, 12 pricing points from Natural Gas Intelligence’s (NGI) Daily Gas Price Index for calculating cash-outs on its system, replacing broader indexes from other sources. Tennessee said the changes were requested by certain shippers and noted that “Natural Gas Intelligence publishes multiple region-specific indices, which reflect the market-determined pricing points prevailing on Tennessee’s system.”

Also, as required by the Federal Energy Regulatory Commission’s Policy Statement of Natural Gas and Electric Price Indices, an independent auditing firm recently completed an agreed upon procedures (AUP) study of NGI’s price setting procedures and its methodology, verifying the accuracy of computations, recordkeeping, provenance and data collection. For more information on the review, please visit our website at www.naturalgasintel.com, and select *New* NGI Price Index Audit Report Results from the Data dropdown menu at the top of the page.

For free trial access to NGI’s Shale Daily, visit naturalgasintel.com/trial.

For more information about NGI products or services, visit our website at naturalgasintel.com or contact James Geanakos at 703.318.8848 james.geanakos@natgasintel.com

Contacts

Natural Gas Intelligence
James Geanakos, 703-318-8848
james.geanakos@natgasintel.com

Release Summary

Natural Gas Intelligence, a leading natural gas market publication, announced today it has published a detailed methodology for NGI’s Shale Price Index (SPI).

Natural Gas Intelligence