Electronic energy marketplace IntercontinentalExchange (ICE) and Intelligence Press Inc.(IPI), publisher of the Natural Gas Intelligence (NGI) newsletters, announced Thursday they have entered into a purchase and leaseback agreement giving ICE the ownership of the NGI natural gas price indexes and the exclusive right to license them for exchange settlement and clearing. Under a perpetual leaseback, IPI will continue to collect and aggregate transactions from the wholesale natural gas market as well as determine and publish the NGI indexes for its subscribers.
In addition to providing daily and monthly spot price discovery for the industry, NGI's indexes are used by ICE and others for daily and monthly settlement and clearing, particularly in Midwest and California natural gas markets.
"We are pleased to work with NGI in acquiring the ownership and intellectual property rights for this valuable suite of indexes," said David Goone, chief strategic officer for ICE. "Together with the recently announced licensing of the leading Canadian index through our NGX alliance, we believe we are ensuring our ability to settle these important cleared contracts."
"Under the agreement IPI will continue to have full responsibility for the price collection, aggregation and publication of the indexes," said Ellen Beswick, IPI publisher and founder. "And we will continue to provide news and price data to our subscribers. Intelligence Press is not going away, and in fact, this deal helps ensure our survival in the growing electronic trading world.
"At IPI we've been covering the natural gas business for more than 25 years. We've seen the market develop from the very beginning of deregulation. We survived the so-called Enron meltdown. Now, we see a future that has a lot to do with electronic trading, and we won't be left out. Meanwhile, it's business as usual for all of our newsletters and for our GasMart conference. Intelligence Press is an independent, family-owned business and will continue to be. Furthermore, I'm not retiring," Beswick said.
"We have worked side-by-side with ICE, regulators and the industry to improve the price transparency process. In the process we developed a strong respect for the ICE operations and the ICE personnel with whom we have worked," she added. "This alliance with the leading electronic exchange puts us on the path to the future, working with an exceptional company."
Two weeks ago ICE announced its alliance with Canada's Natural Gas Exchange Inc. (NGX), a 12-year-old physical energy exchange, clearing and settlement facility that is a subsidiary of the TSX Group Inc. (TSX), parent of the Toronto Stock Exchange (see Daily GPI, March 29). NGX, which has a robust Canadian physical trading and clearing business, produces the AECO/NGX - Intra Alberta natural gas index, which is referenced in many swaps transactions in Western Canada.
The fast-moving electronic trading exchange branched out into soft commodities with the $1 billion-plus ICE merger with the New York Board of Trade (NYBOT), the 100-year-old open outcry exchange for sugar, coffee, cocoa, cotton and other commodities and financial products. ICE beat out a number of rivals for the NYBOT acquisition (see Daily GPI, Jan. 16). ICE now is in a battle with the Chicago Mercantile Exchange for a partnership with the Chicago Board of Trade (see Daily GPI, March 20).
ICE also is a major sponsor of IPI's GasMart 21st annual conference and tradeshow, which will be held in Chicago May 9-11; ICE will host an industry reception and conduct a workshop for traders on its trading system.
IPI, headquartered in Dulles, VA, has been collecting, aggregating and publishing spot natural gas price indexes since 1983. Its natural gas and power news and pricing publications include Natural Gas Intelligence, NGI's Daily Gas Price Index, NGI's Weekly Gas Price Index and Bidweek Survey and Power Market Today. IPI's more than 100 daily and monthly price indexes, determined from confidential transaction information, are provided to IPI voluntarily by industry traders according to guidelines set out by the Federal Energy Regulatory Commission (FERC), and are relied on by the industry for price discovery.
ICE, headquartered in Atlanta, operates the leading global, electronic marketplace for trading both futures and OTC energy contracts and the leading soft commodity exchange. ICE's markets offer access to a range of contracts based on crude oil and refined products, natural gas, power and emissions, as well as agricultural commodities including cocoa, coffee, cotton, ethanol, orange juice, wood pulp and sugar, in addition to currency and index futures and options. ICE conducts its energy futures markets through its London-based subsidiary, ICE Futures, which offers liquid markets in the oil benchmarks, Brent Crude futures and West Texas Intermediate Crude futures. ICE conducts its agricultural commodity futures and options markets through NYBOT.
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