NGI The Weekly Gas Market Report
The battle lines are forming as competition for recognition asthe top online energy trading platform heats up. The Energy TradingPlatform Holding Company (ETPHCo.), comprised of six of the leadingpower and natural gas trading companies, has entered into a deal topurchase an interest in Atlanta-based IntercontinentalExchange,which claims to be the world’s largest Internet-based,over-the-counter (OTC) marketplace for energy and metals.
In addition to purchasing an interest in the Exchange, each ofthe partners has committed to a significant level of annualparticipation to provide liquidity. American Electric Power, AquilaEnergy, Duke Energy, El Paso Energy, Reliant Energy and SouthernCompany Energy Marketing make up the six new partners of the onlinetrading platform. The six energy companies formed ETPHCo. in Aprilto create an independent power and natural gas trading exchange(see Daily GPI, April 14).
In 1999, the companies accounted for the trading of approximately 1billion MWh and 42 Bcf/d in North America. The deal comes just weeksafter EnronOnline, currently the top volume gas and power exchange,formed alliances with two other energy trading platforms,HoustonStreet.com and TrueQuote.com (see Daily GPI, July 13).
The original company of Continental Power Exchange, developedthe trading platform software in-house in early-2000. The softwarecalled The ICE, is a scalable trading system which will allow userssecure, anonymous, access with global trading support at all hoursthrough the business week, the company said.
Continental then approached major commodity trading firms to secureliquidity. The result was the formation of IntercontinentalExchange,which included BP, Deutsche Bank, Goldman Sachs, Morgan Stanley DeanWitter, Royal Dutch/Shell Group, SG Investment Banking and TotalfinaElf. IntercontinentalExchange joined the flood of start-up onlineenergy trading sites in March as an oil and precious metal tradingplatform (see Daily GPI, March 22).
Precious metals will begin trading spot, forwards and optionsonline at www.intercontinentalexchange.com inAugust. Natural gas, oil and power will follow with a start-up time inthe fall. The exchange will be open to the whole commercial market,with no memberships or fees, just trade charges, the company said.
“The expanded IntercontinentalExchange will enable users of oursystem to trade virtually the entire OTC energy complex – oil,power, and natural gas – across a single platform, and on a globalbasis,” explained Jeffrey Sprecher, Intercontinental’s CEO. “Withthe quality, breadth and sheer volumes that our partners bring tothe market, we will be able to offer traders real-time access toliquidity and capture a significant portion of the vast market forOTC commodities brokerage.”
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