UBS Warburg Energy started financial energy trading operations last week and completed a partial reincarnation of EnronOnline — now called UBSWenergy.com. The web site was up and running Monday with financial North American natural gas and power products being offered. A spokeswoman said physical products would be made available as soon as UBS is able to complete transportation agreements with gas pipelines and FERC approves the company’s market-based trade authority for power sales.

Greg Whalley, managing director UBS Warburg Energy and the former COO of Enron, said he believes the company and its new online operation will provide much needed liquidity to the energy marketplace. All transactions on the web site will be backed by the AA+ credit rating of UBS AG.

UBS bought the North American natural gas and power trading business of Enron earlier this month for no money down, assuming none of Enron’s past, current or future liabilities or trading positions. Enron will receive a royalty calculated as a percentage of the income of the trading business, which in the first five years translates to about 33% of the revenue.

In addition to the electronic trading platform, UBS Warburg Energy also includes the management team and 625 former Enron employees who built the Enron energy trading operation into a market leader. The company’s staff will remain on the fifth and sixth floors of the new Enron building in Houston. Enron management has moved up from the trading floors to the fiftieth floor, the spokeswoman said.

The company hopes UBSWenergy.com eventually will be able to duplicate what was once the energy industry’s leading trading unit by using Enron’s e-commerce technology to provide real-time bid and offer prices for North American natural gas and power products.

“We’re getting out there and really trying to reestablish our business,” said spokeswoman Jennifer Walker. “We’ve been talking to customers for the past couple of weeks so this process is moving forward.” She said the company still isn’t prepared to make any growth forecasts for its operations.

One gas marketer said although he hadn’t had a chance to try out UBSWenergy.com he expected to begin using the system soon because of the solid credit backing. “I see no problem with the potential Enron taint,” he said.

However, for another marketer, the deep scars Enron left were far too much to forget in this short a time. “There’s no way in the world they’re getting any of our business [unless] they pay us the $40-50 million we got burned on dealing with Enron…That [bad debt] still leaves a sour taste in our mouths, especially since many of the UBS traders are the same ones that were with EOL before it went under. UBS has tried to come through our physical desk and our risk desk and they have been rebuffed in all cases.”

One source said traders will have to pay attention to the new site. “Everyone is looking at it, and if you’re not, then that is information that your competitor has that you don’t. You can be upset about it, or you can try to make the best of the situation.”

©Copyright 2002 Intelligence Press Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of Intelligence Press, Inc.