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NGI Report Identifies, Compares Top Gas Producers and Traders

BP plc was the only one of the top five U.S. producers of natural gas that also showed up among the top five gas marketers in 2010, according to an analysis by Natural Gas Intelligence (NGI) of federal filings that showed a 6% gain in trading in 2010 over 2009.

BP led the marketers in combined natural gas sales and purchase volumes, followed by Shell Energy NA, ConocoPhillips, Macquarie Energy and J.P. Morgan, according to an in-depth NGI report of 2010 Form 552 filings with the Federal Energy Regulatory Commission (FERC).

On the production side ExxonMobil led the top five, followed by Chesapeake Energy, BP, Anadarko Petroleum and Devon Energy, based on data from producers filed with the Securities and Exchange Commission (SEC).

Combined reportable sales and purchases of U.S. gas in 2010 were up 6% year-over-year to 121,682 TBtu, but were still lower than the 123,842 TBtu total in 2008, according to company submissions to FERC. The 678 individual entities that reported transactions in 2010 were down from the 706 in 2009, suggesting some consolidation in the industry.

BP had combined purchases and sales in 2010 of 8,456 Bcf for a 7.1% share of the market. Shell Energy NA, with 6,119 Bcf had a 5.2% market share, followed by ConocoPhillips with 5,827 Bcf and a 4.9% share. Macquarie bought/sold 5,588 Bcf for a 4.7% market share. J.P. Morgan increased its sales 149% to go from 17th to fifth place with a 3,490 Bcf total or 2.9% of the market. Rounding out the top 10 in the Form 552 totals were: Chevron Corp., EDF Trading NA, Tenaska, Total SA and BG Group.

On the production side, ExxonMobil's 2010 total (pro forma including XTO) came in at 1,515 Bcf, followed by Chesapeake with 925 Bcf, BP with 861 Bcf, Anadarko with 829 Bcf and Devon with 716 Bcf.

According to NGI's tallies of the top 50 companies responding to FERC, the biggest jump was reported by Russia's Gazprom in 37th place, which climbed by 1,269% to 818.5 TBtu.

Deutsche Bank, CitiGroup, Bank of America/Merrill Lynch and Barclays Bank were also among the top 50 traders.

Joining the list of the top 50 marketing companies in 2010 were Direct Energy Marketing, Texla Energy Management, Cima Energy Ltd., Gavilon and United Energy Trading LLC. Dropping out of the top 50 were Constellation Energy, Cross Timbers, Fortis Energy Marketing, Nexen, Nicor and NiSource.

A comparison of Form 552 sales only data with production numbers from the Energy Information Administration (EIA) showed U.S. natural gas sales volumes in 2010 came in at 2.64 times the amount of actual marketed production. (In the overheated marketing bubble before the Enron crash in the early 2000s, anecdotal reports had gas trading 10-12 times or more.)

Sales volumes were 61,111 trillion Btus (59.5 Tcf) for the year, according to the reportable transaction information for 2010 submitted on FERC's Form 552, while EIA reported 22.6 Tcf of marketed production, indicating on average the same gas was sold 2.64 times between the wellhead and the burnertip.

The percentage of volumes reported to FERC, which were eligible to be included in price indexes such as those published by NGI, stayed steady in 2009-2010 at roughly 30%. Of those eligible volumes 53.8% were reported to indexes in 2010, up from 51.3% in 2009.

Volumes tied to daily or monthly indexes were nearly the same in both years at about 68-69% of total volumes reported.

Physical basis transactions comprised 7.4% of total transacted volumes in 2010, up from 6.8% in 2009, indicating only a slight increase in reliance on the Nymex settlement.

FERC's 552 survey covers the great bulk of trading, although it does not encompass the entire market since it limits "reportable" transactions to encompass its specific objective, which is to determine how much of the market contributes to published indexes and how much is tied to those indexes.

Companies must fill out and file a Form 552 report annually if either their sales or purchases run more than 2 TBtu. Only arms-length physical gas transactions that are tied to a day-ahead or month-ahead index, or that contribute to, or are eligible to be contributed to the formation of a gas index are reported. That necessarily excludes bundled (gas plus transportation) retail sales by utilities at a tariff rate, or sales and purchases outside the day-ahead or month-ahead markets.

Companies may aggregate affiliate data or file separately. For its analysis NGI has aggregated all affiliate data to get company-wide totals and in some cases converted thermal units to cubic feet to facilitate comparisons with production data.

To purchase a copy of the detailed NGI report with conclusions and tables listing the top 50 trading companies in the United States by their buy/sell volumes compared to 2009, and the top 50 publicly-traded producing companies in the United States with production and sales totals, plus breakdowns of 2010 total traded volumes by types of companies, visit http://intelligencepress.com/ancp/.

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