In the new economy, while energy-intensive industrial businesslags, the growing information technology (IT) and telecom sectors”should account for an increasingly large piece of the total energypie,” according to an industry analysis report released by J.P.Morgan. And some will profit more than others, the financial giantsaid, in naming seven natural gas-based companies the winners inthe new market.
Power demand increasingly is hyped by the new world ofelectronics, J.P. Morgan said, estimating that the averageweb-hosting center uses the electricity equivalency of eight40-story office buildings. And behind that power is natural gas.
Anadarko Petroleum, Devon Energy, Duke Energy, El Paso Energy,Enron, Entergy and Williams Co. are the companies J.P. Morganbelieves will lead the charge, with “top management, the rightportfolio of physical assets and skill sets, and a proven trackrecord.”
As the energy industry has seen this summer, demand for powerfar outweighs supplier capacity, and the power generating industryis busy at work playing catch-up. Almost all of what is being builtto meet this demand is efficient natural gas-fired capacity, whichbodes well for natural gas E&P companies and pipelines,”analysts Anatol Feygin, Kyle Rudden and Waqar Syed said in thereport. “We believe that a handful of E&P, pipeline andelectricity generation companies are positioned well to profit fromthis dynamic.”
J.P. Morgan estimates that an average of 20-30 GW a year will beconstructed over the next few years “with the peak occurring in2001 and 2002. Over 95% of the proposed plants will be gas-fired toease environmental impact. Adding to natural gas dependency,analysts estimate that 40 GW of nuclear plant generation will beretired between 1998 and 2020. Natural gas has enjoyed a 1.8%annual growth rate during the 1990s. If electric generation growsto 20-30 GW a year, the annual gas growth rate through 2010 shouldbe 3.1%. J.P Morgan rated the seven energy companies a buy.
©Copyright 2000 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |