Enron? Enron who? That may well be the response by the leaders in NGI‘s quarterly ranking of North American gas marketers after the former market leader, which had led the rankings since 1997, was displaced by companies that have traditionally done well but never grabbed the brass ring in gas sales. Mirant, which last year bought TransCanada — another top 20 contender in year-end rankings — pulled to the top of the list in the final quarter of 2001, with a near-111% jump in sales, followed closely by Aquila, which saw its sales increase 35%.

Overall, however, the top seven marketers’ averages for the fourth quarter of 2001 were remarkably close compared to when Enron topped the rankings, with the spread between first-place Mirant and seventh-place Dynegy Inc. only 2.8 Bcf/d. Comparatively, the third quarter 2001 sales showed a spread of 13.8 Bcf between first place and seventh — when Enron Corp. was averaging 26.1 Bcf/d in sales.

The spread of Enron’s business was noticeable. As Enron’s trading business fell off and then all but disappeared at the end of the year, it becomes clear from the gas sales that customers decided to spread their risk around more. For the top seven ranked marketers for the fourth quarter, average gas sales were 94.21 Bcf/d, compared with 106.1 Bcf/d for the third quarter of 2001, with almost 25% of that third quarter business Enron’s alone.

“In the last quarter of 2001, there’s a lot of change, no question about it,” said energy analyst John Olson of Sanders, Morris Harris in Houston. He agreed that without Enron’s domination of energy trading, there definitely was more parity in the rankings — and he said he expected that to continue.

“It doesn’t look like there’s any breakaway situation here,” Olson said. He noted that the synergy between gas sales and power sales, however, may not be going as strong as before because the “markets are under siege,” with collateral damage related to Enron. Gas sales are picking up; “power is dead as a doornail.”

In the final quarter, Mirant averaged 15.6 Bcf/d, compared with 7.4 Bcf/d a year earlier. Kansas City, MO-based Aquila, meanwhile, was right on its heels, averaging 15 Bcf/d compared with 11.1 Bcf/d in the final quarter of 2000. Mirant had been in fifth place in NGI‘s fourth quarter rankings a year ago, and it also ranked fifth in the third quarter. Aquila was tied for sixth place a year ago, and had been ranked seventh in the third quarter of 2001.

For Mirant, faced in recent weeks with liquidity issues and ratings downgrades, the news that it was the North American gas sales leader volume-wise was good news indeed — especially following the collapse of perennial chart topper Enron.

“Despite scrutiny over accounting and financial disclosure and the crash of the largest market player in the industry, competitive markets continue to thrive,” said Mirant Americas Group CEO Richard Pershing. “Products continue to be delivered and prices have not spiked. Being the industry’s leading gas marketer supports Mirant’s commitment to deliver quality, cost efficient and reliable products and services to our customers.”

Mirant CEO Marce Fuller told analysts earlier this month that the company hopes to hammer out some type of deal by this summer with a commercial or investment bank to help bolster its energy marketing and risk management business (see Power Market Today, March 6). Mirant officials also have considered a possible joint venture with a bank or large insurance firm to support its marketing operation and free up collateral for other actions to help restore its credit rating to investment grade.

Pershing credited Mirant’s current strength to its integrated strategy, saying, “Our trading and marketing operation is a risk-management tool, which we use to enhance asset performance and drive profitability.”

When asked whether Mirant’s credit problems could affect its gas sales into the future, analyst Olson said it “probably will be more difficult for them to do the business.” However, he added that Mirant is not the first to lose its investment grade rating and still do well. Olson said CMS Energy’s gas sales have steadily increased (it did not make the NGI top 20 list), and it continues to steadily and slowly grow.

In third place for the fourth quarter was American Electric Power (AEP), which nearly doubled its volumes with a 176% hike. Gas sales averaged 13.51 Bcf/d for the quarter, up from 4.89 Bcf/d a year earlier. AEP had held second place a year earlier, and also was in second place in third quarter volume sales.

AEP’s Tom Ayres said the rise was partly because of the company’s acquisition of Houston Pipe Line, as well as the volume growth from its acquisition of Louisiana Intrastate Gas. “Gas trading is a big driver in our earnings,” said Ayres. “It fits with our concerted efforts.”

BP, tied for sixth place in 2000, rose to the fourth position, averaging 13.5 Bcf/d, a 25% hike from 10.8 Bcf/d for the final quarter of 2000. Reliant dropped a notch to fifth place from a year earlier, averaging 12.6 Bcf/d. Its volumes were up 24% from 10.2 Bcf/d in sales for the fourth quarter of 2000. Duke Energy Corp., meanwhile, took a tumble from its third place perch to stand sixth in the 2001 fourth quarter rankings. Duke averaged 12.2 Bcf/d, a drop of 1% from its 12.3 Bcf/d average sales a year earlier. Dynegy rose one notch to seventh position for the quarter, averaging 11.8 Bcf/d, up 13% from a year earlier when volumes averaged 10.4 Bcf/d.

El Paso Corp. and Sempra saw the highest drops in sales for the quarter. Sempra also fell from NGI‘s top 10 list. El Paso saw sales dip 23.4% in the quarter and Sempra saw a drop of 26.2%. El Paso actually moved to eighth place from 11th in the final quarter of 2000, but its gas sales were down, averaging 9.5 Bcf/d compared with 12.4 Bcf/d. Sempra dropped from the top 10 list, averaging 7.44 Bcf/d, down from 10.08 Bcf/d a year earlier. Coral and Conoco took the ninth and 10th spots respectively for the fourth quarter, with Coral averaging 9.4 Bcf/d and Conoco averaging 9.3 Bcf/d. Entergy-Koch Trading was 12th on the list, averaging 7.1 Bcf/d in sales.

After that, the sales dropped off quite a bit, with noticeable parity in the final eight positions. Only 1.8 Bcf/d separates gas sales for Williams, ranked 13th on the list, and Cinergy, ranked 20th. Williams averaged 4.8 Bcf/d and Cinergy averaged 3 Bcf/d in sales for the quarter. Cook Inlet saw its sales jump to 4.6 Bcf/d for the quarter while Dominion jumped 50% in sales to stand at 4.5 Bcf/d.

Occidental made a push for gas sales in the fourth quarter, with a 104.5% hike in sales, climbing to 4.5 Bcf/d from 2.2 Bcf/d a year earlier. PanCanadian had gas sales of 3.7 Bcf/d, while Exxon Mobil averaged 3.6 Bcf/d. Anadarko Petroleum Corp. averaged 3.6 Bcf/d, with sales up 12.5%.

For the year, Mirant also led the way, with a 92.8% jump overall from 2000. Its gas sales for 2001 averaged 13.3 Bcf/d, up from 6.9 Bcf/d a year earlier. BP came in at number two for the year, averaging 12.6 Bcf/d, up from 8.4 Bcf/d in 2000. Duke was third with 12.4 Bcf/d, while Reliant was close behind in fourth place, averaging 12.2 Bcf/d in gas sales. Aquila rounded out the top five for the year, averaging 12 Bcf/d, up from 10.4 Bcf/d from 2000.

For the rest of the top 10 in 2001, Dynegy averaged 11.3 Bcf/d and AEP had 10.6 Bcf/d. Tied for the year were Coral and El Paso, which both averaged 9.2 Bcf/d. Coral’s business for the year, however, dropped 9.8%, down from 10.2 Bcf/d a year earlier, while El Paso’s was up 17.9% from its 7.8 Bcf/d average in 2000.

TransCanada, now a part of Mirant, averaged 7.8 Bcf/d for 2001, while Conoco averaged 7.1 Bcf/d. Entergy-Koch averaged 6.9 Bcf/d while Williams averaged 4.41 Bcf/d. Other marketing sales daily averages in the top 20 were Cook Inlet, 4.4 Bcf; PanCanadian, 3.7 Bcf; Exxon Mobil, 3.6 Bcf; Dominion, 3.5 Bcf; Anadarko, 3.4 Bcf; and TXU, 3.4 Bcf.

*Volumes represent North American physical natural gas sales and exclude financial transactions. Sales volumes were provided by company officials. Numbers in ( ) indicate third quarter 2001 ranking. Enron sold 26.7 Bcf/d in 1Q 2001, 25.3 Bcf/d in 2Q, 26.1 Bcf/d in 3Q and was ranked No. 1 in each of those quarters. No fourth quarter data was available for Enron.

*Volumes represent North American physical natural gas sales and exclude financial transactions. Sales volumes were provided by company officials. Numbers in ( ) indicate 2000 ranking. Enron sold 23.8 Bcf/d in 2000 and was ranked No. 1. No year-end 2001 data was available for Enron.

©Copyright 2002 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.