Westcoast Sells NGX to Sweden's OM
Westcoast Energy exercised its option to sell its remaining 49%
interest in NGX Canada (NGX), an electronic gas trading exchange,
to OM Gruppen of Stockholm, Sweden. The deal is likely to lead to a
significant upgrade of the Canadian trading system possibly to a
continental system with multiple commodity offerings, according to
its new owner.
"Through an early exercise of our right to acquire all of NGX,
we can develop NGX faster," said Thomas Bendixen, head of OM
Business Area Transaction in North America. "We plan to implement a
new clearing structure in order to capitalize on OM's clearing
expertise and widen the product range. In time, we will develop NGX
from being a regional marketplace in Alberta to cover all of the
North American market."
NGX (www.ngx.com), located in Calgary, currently provides
electronic trading and clearing services to natural gas buyers and
sellers at seven markets in Canada, including the AECO-C hub in
Alberta, Empress and five eastern points: Dawn, Niagara, Parkway,
Chippawa and Iroquois. Over the past six years, NGX has grown to
serve 120 customers with trading activity averaging over 200 Bcf
per month. The system averages more than 200 transactions a day
with about 80% at Alberta Energy's AECO-C hub.
NGX President Peter Krenkel agreed with Bendixen that the
transaction probably would lead to an aggressive expansion,
including additional commodities and services. "OM has a much more
aggressive view on expansion and growth in the business so I think
you'll see NGX become more aggressive in terms of the markets and
the commodities that it targets."
This deal follows Westcoast's initial sale of 51% of NGX to OM
in February 2000. Westcoast said it expects an after-tax
contribution to net income of $6 million from the sale. Westcoast
spokesman Bob Foulkes said the exchange was not part of Westcoast's
core operations of gas distribution and transmission. He denied
that rapidly growing competition in energy e-commerce had anything
to do with the sale.
Krenkel hopes some of OM's international success will spill over
into NGX's operations. OM operates equity and fixed income
exchanges in London and Stockholm. It develops technology that
increases the efficiency of financial and energy markets throughout
the world, e.g., the Nordic electricity exchange Nord Pool and the
Finnish electricity exchange EL-EX. OM has operations in Europe,
North America and Asia with offices in eleven countries.
©Copyright 2001 Intelligence Press, Inc. All rights
reserved. The preceding news report may not be republished or
redistributed in whole or in part without prior written consent of
Intelligence Press, Inc.