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Usual Suspects Jockey for Top Gas, Power Marketer Slots

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&ampE 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 issue).

"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 top-10.

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 U.S.

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

 

1998 Gas Marketer Ranking by Physical Sales Volume (Bcf/d)


   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

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