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Gas Attracts Huge Numbers on EnronOnline

Gas Attracts Huge Numbers on EnronOnline

From gas and power to clean air credits, bandwidth and plastics, you name it, and EnronOnline now sells it, but out of the plethora of commodities now trading on the site worldwide, North American natural gas still tops the list of most actively traded.

The rapidly growing e-commerce site, which Enron claims is now the world's largest with more than $50 billion in transactions so far this year, consumes much more than 50% of Enron's wholesale commodity transactions, including more than 10 Bcf/d of gas in the first quarter.

"The highest traded commodity on EnronOnline is North American natural gas because that's the biggest marketplace that we have in the first place. The second [largest] market is power, and it follows exactly the size of each of our businesses and that is reflected in the numbers that are traded on EnronOnline," Louise Kitchen, managing director of EnronOnline, said in an interview with NGI last Thursday.

"We did $2.25 billion [in total transactions online] yesterday. It's growing all the time. I think today we've done the most transactions we've ever done, over 2,500. I think one of the [overseas] markets just closed, like Nordic power or something like that.

Enron launched EnronOnline on Nov. 29, 1999, and currently more than half of Enron's wholesale transactions are conducted online. In its first 26 weeks, more than 130,000 transactions have been conducted.

Kitchen said EnronOnline is seeing growth on two levels. "We're seeing growth because we are increasing the levels of efficiency in certain markets, I believe. I think EnronOnline provides so much price transparency and an efficient way of transacting that it does increase those markets. U.S. natural gas would fall into that category of increased gains and efficiencies in terms of transactions." In terms of some of the developing markets, such as the Belgian gas market, Kitchen said, EnronOnline provided prices where there were none before. Since coming online Jan. 5, 2000, the Belgian gas portion of EnronOnline has quadrupled in volume, she said.

Although she provided no predictions on future growth for EnronOnline --- partly because all her previous annual predictions were reached during the first quarter --- Kitchen said she doesn't expect competition from the many other electronic energy trading sites to detract from the volumes on EnronOnline. "We don't really compete directly with those other platforms because they're all matching platforms."

Kitchen said the claim about being the largest e-commerce site in the world is based on the goods transacted through the site and the price of those goods. "We are taking the price of all transactions times the volumes of all transactions" and they exceed those of Amazon.com and Dell.com.

Rocco Canonica

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