Leading Energy Traders Partner in TradeSpark
A stable of some of the leading energy companies have partnered up to
form TradeSpark, an electronic marketplace powered by developer eSpeed
Inc., that will offer natural gas, electricity, coal, weather derivatives
and emissions credits through the Internet, private enterprise or via voice
brokers beginning this week.
Several energy company trading subsidiaries, including TXU Energy Trading,
Shell affiliate Coral Energy, Dominion Resources Inc., Koch Energy Trading
Inc. and Williams Energy Marketing and Trading Co., along with Cantor Fitzgerald,
a voice brokerage, announced the agreement last week. Dynegy Inc. and Entergy
Corp. said they would also become partners when the marketplace begins
operations later this month.
In the past 12 months, TradeSpark's new and future partners estimate
they have traded approximately 34.5 Bcf/d and 467 MW of electricity. In
the second quarter of 2000, the partners and Dynegy and Entergy estimate
that together they've traded about 20% of all gas and power in North America.
The announcement comes three months after eSpeed, Dynegy and Williams
Energy Services, a unit of Williams, agreed to develop electronic marketplaces.
As part of that deal, Dynegy and Williams each purchased a $25 million
equity stake in eSpeed (see NGI, May 1).
TradeSpark spokesman Harry Fry said that the venture will "revolutionize"
energy trading. "The TradeSpark partnership is inclusive and draws
on the experience of all participants to bring speed, neutrality, efficiency
and technological leadership" to the market.
eSpeed, headquartered in New York City, uses a network distribution
system to provide market information and instant trade execution. Its systems
currently trade $150 billion a day in transactions, using about 12% of
the system's capacity. It now sells U.S. Treasury securities, municipals
and other debt products through a propriety electronic trading platform.
"If it can be traded, it can be traded on eSpeed," said Howard
Lutnick, eSpeed's CEO. "If there isn't a market for it, then we'll
develop the marketplace for it. The possibilities are endless." He
said that TradeSpark would launch eSpeed's technology "into massive,
"Joining this exchange accelerates TXU's commitment to step up
its presence in the energy trading industry," said V.J. Horgan, president
of TXU Energy Trading. "It's critical for key industry players to
accelerate an electronic exchange because efficiency is vital to expanding
Bill Hobbs, president of Williams Energy Marketing and Trading, said
that his company's role in TradeSpark "confirms Williams' commitment
to maximize the efficiency that e-business represents to the energy industry."
Carolyn Davis, Houston