Usual Suspects Jockey for Top Gas, Power Marketer Slots
The faces in the top half of NGI's ranking of the top 20 gas
marketers haven't changed much but their volumes certainly have, in
some cases showing substantial growth. And while only one company
joined the top-10 for the first time in 1998, nearly every one of
the biggest players saw its position change in the ranking.
First the news that really isn't: Enron is still No. 1. The Big
E further solidified its place at the top by growing volumes 10% or
1.05 Bcf/d in 1998. Enron is a solid 1.53 Bcf/d ahead of No. 2
Aquila Energy, which rocketed up to second place from fifth last
year on the strength of 41% growth in volumes, a full 2.8 Bcf/d
increase. PG&E sits at third for another year despite volume
growth of 30%. And Duke Energy climbed to No. 4 following 15%
growth in volume.
While Aquila rode the escalator up to No. 2, Dynegy was heading
the opposite direction from the No. 2 spot it held last year.
Dynegy slid in the ranking all the way down to No. 5. But that's
not due to any shrinkage in volume. The company saw modest growth
of 2.5% or 0.2 Bcf/d. That's apparently OK with Dynegy CEO Chuck
Watson who last week in a conference call touted the virtue of
strong margins over big volumes (see related Dynegy story this
"It's time that people recognize that financial performance is
at least as important as overall volumes," Watson said. "Dynegy's
margins consistently lead the industry and we expect that trend to
continue." Dynegy's unit margins on natural gas sales went from
about three cents in fourth quarter 1997 to nearly five cents/Mcf
in 4Q 1998. The margin for all of 1998 was about five cents
compared to four cents in 1997.
(NGI would like to take Watson's advice and pay more attention
to margins when ranking marketers. To that end, marketers will be
invited to share information on margins - standardized for
comparison - for another ranking.)
Continuing down the list, Coral Energy climbed one notch to No.
6, and Engage Energy fell three to No. 7. TransCanada edged up two
slots to No. 8. (Amoco was ranked No. 8 last year. The company, now
BP Amoco, declined to provide 1998 gas volumes.) Southern Co.
breezed in from No. 13 on the wings of 26% volume growth to perch,
at least for now, at No. 9. Southern was the lone new entrant into
the top-10. At No. 10 is Koch Energy, which dropped from No. 9. At
5.15 Bcf/d, Koch sold about 46% as much gas as first-place Enron.
Koch was the only company among the top-10 to see a decrease in
volumes from 1997, not a good sign if it wishes to remain among the
Clearly, it takes big volumes to be at the top. And for
marketers who wished to retain their positions or move up it took
big volume increases. For those on the second half of the list who
would join the bigger players, some climbing is in order. Houston
Industries Wholesale Energy (Reliant Energy Wholesale Group as of
last week) was almost a half Bcf/d short of the No. 10 slot.
Enserch Energy, at No. 20, had about 27% of Enron's volume. KN
Energy, at No. 15, had huge volume growth - 200% - thanks to the
company's January 1998 acquisition of MidCon Corp. Overall, the top
20 North American gas marketers grew volumes by 17% to 117.32
Bcf/d, or nearly twice the average daily gas consumption of the
All but eight of the top 20 gas marketers also appear among the
top 20 power marketers. The eight companies appearing in the gas
ranking but not in power are Coral Energy, TransCanada, Koch
Energy, Columbia Energy, KN Energy, Texaco Natural Gas, Sonat
Marketing, and Enserch Energy. These companies either don't have
power marketing operations or didn't sell enough electricity to
make the ranking.
"There's no sign that the gas industry is suffering from a lack
of attention from marketing companies," said Benjamin Schlesinger
of Benjamin Schlesinger and Associates. "I think what we're seeing
is a broadening of marketing company interests rather than a
pulling back from natural gas. There's still much happening in the
natural gas sphere."
Joe Fisher, Houston
Company 1998 1997 %Chg Bcf Chg Pre. Rank
1 Enron 11.13 10.08 10% 1.05 1
2 Aquila Energy 9.60 6.80 41% 2.80 5
3 PG&E Energy 9.37 7.20 30% 2.17 3
4 Duke Energy 8.40 7.30 15% 1.10 6
5 Dynegy Inc. 8.20 8.00 3% 0.20 2
6 Coral Energy 8.10 6.70 21% 1.40 7
7 Engage Energy 7.00 6.93 1% 0.07 4
8 TransCanada 5.56 5.03 11% 0.53 10
9 Southern Co. 5.30 4.20 26% 1.10 13
10 Koch Energy 5.15 5.30 -3% -0.15 9
11 Reliant Energy** 4.70 4.00 18% 0.70 20
12 Vitol Gas & Electric 4.45 5.68 -22% -1.23 NR***
13 Columbia Energy 4.33 2.43 78% 1.90 NR
14 Sempra Energy 4.24 3.20 33% 1.04 14
15 KN Energy 4.20 1.40 200% 2.80 NR
16 Texaco Natural Gas 3.87 3.58 8% 0.29 12
17 El Paso Energy 3.77 4.27 -12% -0.50 11
18 Williams Energy 3.50 3.20 9% 0.30 16
19 Sonat Marketing 3.40 3.50 -3% -0.10 15
20 Enserch Energy 3.05 1.41 116% 1.64 NR
Total 117.32 100.21 17% 17.11
*Volumes represent North American physical gas sales and exlcude financial transactions.
**Formerly HI Wholesale Energy. ***NR = Not Ranked.
Source: Volume numbers were provided by company officials.
See our Special Features page for previous rankings