The total amount of pipeline capacity traded by the Top 20 increased dramatically over 2008, which is consistent with findings from Capacity Center’s September
Pipeline Ranking Report. The companies within the Top 20 have also changed dramatically over the past year. The new #1 for 2009 is Tenaska with a 159% jump in the number of deals completed and a 133% increase in daily volume traded. Last year’s #1, Merrill Lynch, has completely dropped out of the Top 20 in 2009.
There has been more shifting among the Top 20 than at any time in the past 10 years. A dozen companies came in or out of the Top 20 in 2009. When the price caps came off capacity release deals last summer some amount of shifting was expected, as certain companies have aggressively taken advantage of the new rules. Adding the financial market’s upheaval, demand destruction, huge commodity price swings since last year and packed storage, it’s no surprise that the rankings have been scrambled.
New additions to the Top 20 include Fina (12), Atmos Energy Marketing (14), The Energy Authority (15), JP Morgan (18), and Texla (20). Among those dropping out of the Top 20 aside from Merrill Lynch, include Oneok, Reliant Energy, Louis Dreyfus and Arclight. The three biggest ranking gainers were The Energy Authority, who leaped 215 places and JP Morgan, up139 places and Fina up 27 places.
Total traded capacity volume for the Top 20 as a group was up 27% over the same period in 2008. Of the Top 20, all but 2 had increased activity ranging from 6% to more than doubling over 2008. The top 20 break down into three basic entity types, wholesalers/traders, retailers and asset managers. The current #1, Tenaska did 20% more volume than #2, Hess, yet Hess did almost twice as many deals. This disparity in traded volume versus deal volume is typical of the difference in approaches between wholesale and retail capacity release players.
Capacity Center’s database of all the capacity release deals done on every interstate pipeline was utilized for this capacity release benchmarking report . Ranking data excluded volumes done due to acquisitions and between related non-regulated affiliates however does include trades between regulated entities and their non-regulated affiliates.
Greg Lander is the President of CapacityCenter.com as well as President of Skipping Stone, which owns CapacityCenter.com. Greg was a founding member of GISB (Gas Industry Standards Board – now NAESB). In addition to starting the company, originally as TransCapacity, Greg also started one of the first independent gas marketing companies, Citizens Gas, where he was President and Chairman.
CapacityCenter.com operates a 24/7/365 natural gas interstate pipeline data center covering all the US pipelines. Its automated services monitor capacity release offers, system notices and deal awards information and streams transaction details as they occur to its customers via email for trading, risk and regulatory compliance as well as deal origination and valuation purposes. Visit www.capacitycenter.com for more information.