Trigger Pricing allows buyers and producers to independently manage the natural gas price and basis embedded in the delivered price of gas. Using Trigger Pricing, customers may be able to achieve a more favorable price than the Index Price.

Either the NYMEX or the basis can be triggered. National Fuel Marketing uses the New York Mercantile Exchange as the reference for natural gas contracts price while the basis is market-based and determined by current bids and offers.

Benefits:
Offers natural gas buyers and producers the flexibility to lock in commodity and/or basis prices when they want.

Example:
NFM enters into a transaction to sell gas to a large industrial customer. At the time of purchase, the customer wanted to purchase gas based on an index. NFM offered the customer the right to trigger a fixed price.

With this trigger option, the customer has the right to convert the index price to a fixed price at their convenience and when forward prices are favorable. Halfway through the term with NFM, forward prices for the remaining term have dropped and the customer would like to trigger a fixed price. The customer simply notifies NFM to trigger both the Nymex and the Basis and NFM converts their index price to a fixed price.