Cinergy Corp. took a huge step in growing its commoditymarketing operation yesterday with the purchase of Producers EnergyMarketing, LLC, (ProEnergy) from owners Oryx Energy and ApacheCorp. for $42.5 million and with the signing of a 10-year marketingalliance that covers both producers’ entire marketable gas supply,or about 1.1 Bcf/d.
ProEnergy markets about 1.7 Bcf/d of gas to more than 200 largeindustrial buyers and local distributors. The large wholesale gasmarketing operation will be combined with Cinergy’s wholesaleelectricity marketing business, which reported 200% growth over thepast two years and sold about 56.6 million MWh in 1997.
“Through integration with Cinergy’s electric trading andmarketing, financial risk management and origination services, thistransaction gives us an additional platform for further growththrough internal expansion and acquisition,” said Cinergy CEO JamesE. Rogers.
“[It’s] another step toward achieving our goal of being a toptier energy commodity provider which began with the creation of theEnergy Commodities Business Unit two years ago. Since then, othersteps have been taken, including the acquisition of GreenwichEnergy Partners, the creation of Cinergy Capital Services, theselection of Cinergy by the New York Mercantile Exchange as adelivery point for futures contracts and expansion of our powermarketing and trading business.”
Cinergy recently completed a reorganization of its power and gastrading operations in the wake of former President J. WayneLeonard’s departure to Entergy Corp. Cinergy named Madeleine W.Ludlow as the new president of Cinergy Capital and Trading andbrought on Michael J. Cyrus, an executive with ElectricClearinghouse, to assume the post of executive vice presidentoverseeing power trading operations. A Cinergy spokesman said Cyrusnow will head up both gas and power marketing and report to Ludlow.
The alliance with Oryx and Apache gives Cinergy a geographicallydiverse gas supply portfolio, which includes production in thesouthwestern U.S., Rocky Mountains, Gulf Coast, Gulf of Mexico,Michigan and Canada.
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