In the U.S., holders of firm natural gas pipeline transportation or storage capacity can resell their capacity rights to other market participants in the secondary market. This is called capacity release and was authorized by FERC Order 636, issued in 1992. This enables a firm capacity holder to assign on either a temporary or long-term basis any unused firm capacity in return for compensation. Capacity release offers and transactions are posted on the pipeline’s electronic bulletin board (EBB) and are subject to FERC rules and regulations. Primary among these are requirements that capacity offerings be non-discriminatory. Posting of available transportation ensures all parties have the opportunity to obtain released capacity and provides for price transparency. If a capacity holder is looking to permanently release capacity, it is posted on the EBB and sold to the highest bidder. While the pipeline may have certain creditworthiness requirements for a third-party purchasing capacity, any qualified buyer is entitled to all the rights and privileges of the original owner of the capacity.
Originally, FERC did not allow capacity release prices to be higher than pipeline tariff rates, but those rules have been changed to allow releases of less than one year to be at a market-based price. Releases of more than one year are still capped at the tariff rate.