There is a global theme with a mixture of hard asset and financial players in some of the recent consolidation among energy marketing/trading firms, according to the representatives speaking on a natural gas buying panel at GasMart 2007 in Chicago Thursday. Fortis Energy Marketing/Trading, Integrys Energy Services Inc. and ScottishPower's U.S.-based PPM Energy all are the product of recent consolidations.
Fortis' marketing/trading unit was formed in the last year as a wholly owned subsidiary of the Fortis Group, a Brussels-based international banking/insurance conglomerate that ranks as the world's second biggest financial institution. The energy marketing/trading section is part of its merchant banking unit, and not part of a Canadian-based energy company.
"We are not associated with the Canadian energy company although many people make that association," said David Duran, managing director, origination for Fortis. "Fortis is very strong credit rated [AA- by Standard & Poor's Ratings Services and Aa3 by Moody's Investor Services]. It has close to a trillion dollars in assets."
Wisconsin-based Integrys Energy Services is a product of the merger earlier this year of the unregulated marketing arms of Green Bay, WI-based WPS Resources Corp. and Chicago-based Peoples Energy Corp. It is a U.S. regionally focused marketing/trading operation that bills itself as providing a national firm's services. The name was developed through a survey of the newly merged companies' employees who told senior management they valued "integrity, honesty and trust" and wanted the company to embody those attributes, according to Debbie McDermid, general manager, commercial/industrial gas, who was part of the industry panel Thursday.
Like the other two firms, Integrys focuses on keeping a "strong financial profile," McDermid said, echoing the fact that since the 2001-2002 wholesale energy market meltdown, credit-standing has become a key driver now. "We have a superior credit rating and assets over $10 billion."
Portland, OR-based PPM Energy began as a regional nonregulated part of PacifiCorp and changed to a tightly focused national wind and natural gas storage developer as part of ScottishPower. Earlier this year, ScottishPower and PPM became part of Iberdrola, the global energy giant based in Barcelona, Spain. "Effective last April 23, our corporate world changed significantly when ScottishPower was acquired," said Kay Atchison, Houston-based origination director for PPM. "Iberdrola is the world's largest wind power developer and a 60-billion-euro company with gas and electricity businesses in more than 40 companies."
Ranked as the lowest greenhouse gas emitting power generator in Europe, Iberdrola is also the largest importer of liquefied natural gas (LNG) there, too, shipping 20% of Spain's gas supply in 2006, Atchison said. Through PPM, Iberdrola has become the third largest gas storage company in the United States (39 Bcf owned by PPM's ENSTOR unit and 58 Bcf contracted by PPM), she said.
While contracting for more storage capacity and looking for new development activity in the sector, PPM is "excited that with this global perspective it is positioned stronger than ever." She said ScottishPower continues to be PPM's parent company.
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