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Amerex Growing Volumes Through BTU Buy

Amerex Growing Volumes Through BTU Buy

Houston-based Amerex Natural Gas Inc. and sister company Amerex Power Inc. together bought the gas and electricity brokerage businesses of Houston-based BTU Brokers Ltd. for an undisclosed price. As a result, Amerex's daily average of physical and paper gas deals grew 12.4% to $287 million, and physical and paper power deals increased 5% to $175 million for a combined annual value of $121 billion in gas and power deals.

"This strategic move allows for further consolidation of natural gas and electric power brokerages," said Amerex President Steven W. Town. "It's good for us and the industry. It strengthens our ability to serve our natural gas clients in a number of markets and our electrical power clients in the Southeast, ERCOT (Electric Reliability Council of Texas) and Cinergy, and adds qualified energy professionals to our team." He said the company is looking for more acquisition deals.

Currently, Amerex trades about 100 Bcf/d of gas, and this deal will add 12 to 15 Bcf to that figure, Town said. Power will see less of an increase, from about 5 million MWh/d to about 5.5. About 80% of Amerex's gas deals are paper while only about 10% of power deals are paper. "We're trying to smooth that out, so to speak," Town said. "We're doing all we can in the power markets to create a financial product, a viable product that traders can use."

Town said the acquisition not only strengthens Amerex's traditional voice brokerage but also reinforces its electronic trading alliance with Altra Energy Technologies and Prebon Energy as Amerex and its strategic partners provide market leadership in trade execution. Emerging electronic trading is being integrated into the market, but Town said Amerex sees strong demand for serving clients with brokers and the added value they offer the estimated 2,000 gas and electric power traders in North America. "There is a need for good, professional brokers to assist in creating liquidity for the market, insuring transparency, and transferring knowledge to the market."

Joe Fisher, Houston

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