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Canadian NGX Adds U.S. Clearing Points

Canada's Natural Gas Exchange (NGX) on June 8 launched four new major clearing points in the U.S. at the SoCal Citygate, NNG Ventura, ANR SE pool, and Tennessee 800L, along with three additional smaller points in Canada.

The four new U.S. clearing points bring the NGX total south of the border to 17, compared to 15 in Canada. NGX, wholly owned by the TMX Group Inc., which operates the Toronto Stock Exchange, sees a market for continuing growth in the states.

"We're really in a growth mode," in the U.S., said Peter Krenkel, NGX president. "Every time we add hubs, we add new customers. There is lots of growth opportunity as a result."

Krenkel said the company has been pushing ahead in the U.S. for about a year, setting up a Houston office and expanding across the country, not just at points where Canadian gas is in play. "We're trying to cover wherever there's big volumes traded. We look forward to continuing to meet market requirements for further expansion opportunities."

While its U.S. volumes are growing with the additional hubs, in Canada "the volumes are about flat, or down a little from 2008," which Krenkel attributed to overall market conditions.

The three Canadian points added were minor ones since NGX has most of the important points covered already, he said. They are a new [TransCanada Pipe Lines] -Suffield 2 physical delivery point in Saskatchewan, which provides for a TCPL Suffield 2 / AECO NIT transportation spread similar to one at Empress, and a new TCPL-Enbridge CDA point in Ontario which encompasses two transportation spreads - and Union Dawn / Enbridge CDA Spread (Transport) and a Union Parkway / Enbridge Spread (Transport).

NGX is offering daily, weekend, monthly and term fixed and basis physical instruments at the trading points. As with all NGX products, trades consummated through the ICE Trading system at both points can be physically and financially centrally cleared by NGX and can be used to reduce or offset margin requirements incurred in other NGX products (see NGI, March 3, 2008).

NGX has additional trading points for crude oil and electricity contracts.

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