Transactions in the physical natural gas market were approximately 56 Tcf in 2009, or about 2.5 times the volume of domestic marketed production, according to an initial analysis of Form 552 filings submitted to FERC.
This means that the “same gas change[d] hands nearly three times on average between producer and final consumer” during 2009, Chris Ellsworth, energy industry analyst with the Federal Energy Regulatory Commission’s Office off Enforcement.
“More than two thirds of gas purchases and sales involved index gas, with the rest being fixed price deals that contribute to those indexes,” he noted. Of the nearly 2,100 respondents and their affiliates, 9% indicated that they voluntarily reported to index price publishers, such as Natural Gas Intelligence and Gas Daily.”
Ellsworth told the Commission that his office would provide “further findings” after they have had a chance to review the Form 552 filings in greater detail.
The Form 552 reporting requirement sprang from Order 704, which FERC approved in December 2007 (see Daily GPI, Dec. 21, 2007).
This was the second year that companies were required to file Form 552s (see Daily GPI, June 29, 2009). The order requires companies to report their total volume of annual sales and purchases; the volume of transactions that were priced at fixed prices; and the volume of transactions that were reported to price index publishers. FERC is requiring market participants to file these reports in order to provide greater transparency concerning the use of indices to price natural gas and how well index prices reflect the market. The Form 552 trading information for 2009 was due at FERC on Oct. 1.
The 552 data collected for 2008 as of Oct. 10, 2009 revealed that 1,097 separate submitters responded to the form, reporting a total physical gas market of nearly 62 Tcf of gas, or almost three times the 21.4 Tcf domestic marketed production in 2008. That discrepancy is explained by the fact that the same package of gas may be resold multiple times.
The Commission also found that the top 10 sellers of physical gas comprise 61% of the total. The top four gas sellers for 2008 were BP plc, ConocoPhillips, Shell Energy North America and Macquarie Cook Energy. BP remained the top seller in 2009, with about 12 Bcf/d, a FERC official said.
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