El Paso Corp. (ticker: EP, exchange: New York Stock Exchange (.N))
News Release -
Six Leading Power and Natural Gas Trading Companies Join IntercontinentalExchange
NEW YORK (July 26, 2000)-Six of North America's
leading power and natural gas trading companies have entered into an agreement
in principle to purchase an equity position in IntercontinentalExchange,
creating the world's largest on-line, over-the-counter (OTC) market for energy
and metals. It was also announced today that trading in precious metals will
commence in August.
The six new IntercontinentalExchange partners are American Electric Power,
Aquila Energy (a unit of UtiliCorp United), Duke Energy, El Paso Energy, Reliant
Energy, and Southern Company Energy Marketing (a unit of Southern Company). In
April, these six companies formed a corporation, the Energy Trading Platform
Holding Company, Inc. (ETPHCo) to create an independent power and natural gas
trading exchange. Together, these companies, in 1999, accounted for trading in
some 1 billion megawatt-hours of electricity and 42 billion cubic feet of
natural gas per day in North America.
IntercontinentalExchange was founded in March as an Internet-based trading
platform for OTC precious metals and oil. Initial partners include BP, Deutsche
Bank AG, Goldman Sachs, Morgan Stanley Dean Witter, Royal Dutch/Shell Group, SG
Investment Banking, Totalfina Elf, and Continental Power Exchange -- which is
providing the trading technology and management team.
"The participation in IntercontinentalExchange will result in the
creation of the largest independent online market for natural gas and power in
North America. It will lead to greater market liquidity and price transparency -
key drivers to a successful online trading business," said Janine McArdle,
President of ETPHCo. "The equity participants in this exchange are leaders
in their respective industries. We are committed to building an independent
exchange that encourages a rapid migration to online trading by providing equal
access to all participants to trade across our platform." In addition to
holding an equity position in the Exchange, each of the partners has committed
to a significant level of annual participation to provide liquidity.
"The expanded IntercontinentalExchange will enable users of our system
to trade virtually the entire OTC energy complex-oil, power, and natural gas-across
a single platform and on a global basis," states Jeffrey Sprecher, CEO of
IntercontinentalExchange. "With the quality, breadth and sheer volumes that
our partners bring to the market, we will be able to offer traders real-time
access to liquidity and capture a significant portion of the vast market for OTC
commodities brokerage," he concluded.
It was also announced today that the first of the Exchange's markets,
precious metals spot, forwards, and options, will begin trading in August.
Energy trading in oil, power, and natural gas products will commence in the
fall. There will be no "memberships" in IntercontinentalExchange and
no dues or fees beyond those incurred in the process of trading. Participation
will be open to all commercial market participants.
As with precious metals and oil products, the overwhelming majority of
trading in the OTC power and natural gas markets is conducted via telephone. Of
the approximately 2.7 billion-megawatt hours and 154 billion cubic feet of
natural gas traded in 1999, Forrester Research reports that only 0.2 percent of
electricity trades and 2 percent of natural gas trades were conducted online.
Forrester predicts these figures will increase up to 25 percent and 11 percent,
respectively, by 2004.
The capabilities provided by IntercontinentalExchange's advanced trading
platform will offer OTC participants increased market transparency, liquidity
and efficiency while preserving the anonymity market participants desire. The
Exchange also plans to develop facilities in the future that would permit market
participants to clear and settle OTC products.
The technological backbone for IntercontinentalExchange is The ICE, a robust
and scalable trading system. The system provides participants with secure access
and global trading support around the clock and throughout the business week.
Based in Atlanta, IntercontinentalExchange offers innovative features such
- robust capabilities for allowing risk managers to dynamically tailor
execution based on their assessment of credit and other counterparty issues;
- a complete picture of market depth;
- sophisticated support tools for strategies such as synthetic spread
- an opportunity for the "paperless back office" through
straight-through processing of trade information.
IntercontinentalExchange recently opened offices in London and New York.
Additional info for editors:
||American Electric Power (NYSE: AEP) is a multinational
energy company based in Columbus, Ohio. AEP is one of the United States
largest generators of electricity with more than 38,000 megawatts of
generating capacity. AEP is also one of the nation's leading wholesale
energy marketers and traders. AEP delivers electricity to more than 4.8
million customers in 11 states - Arkansas, Indiana, Kentucky, Louisiana,
Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia and West Virginia.
The company serves more than 4 million customers outside the U.S. through
holdings in Australia, Brazil, China, Mexico and the United Kingdom.
Wholly owned subsidiaries are involved in power engineering and
construction services, energy management and telecommunications.
||Aquila Energy is one of the largest and fastest growing
energy marketing and risk management organizations in North America. With
its focus on natural gas, power, and a variety of risk management and
custom energy products, the company ranked in 1999 as the second largest
wholesaler of electric power and third largest wholesaler of natural gas
in the United States. As a wholly owned subsidiary of UtiliCorp United,
Aquila is headquartered in Kansas City, Missouri, but also has additional
sales and marketing operations in Houston, Denver, Calgary and other
targeted locations in North America, as well as in the United Kingdom,
Germany, Norway and Spain. Aquila revenues in 1999 were $16.7 billion.
Duke Energy, a diversified multinational energy company,
creates value for customers and shareholders through an
integrated network of energy assets and expertise. Duke Energy
manages a dynamic portfolio of natural gas and electric supply,
delivery and trading businesses - generating revenues of nearly
$22 billion in 1999. Duke Energy, headquartered in Charlotte,
N.C., is a Fortune 100 company traded on the New York Stock
Exchange under the symbol DUK. More information about the
company is available on the Internet at: www.duke-energy.com.
||El Paso Energy Corporation (NYSE: EPG)
provides comprehensive energy and financial solutions through its
strategic business units: El Paso Merchant Energy Company, Tennessee
Gas Pipeline Company, El Paso Natural Gas Company, Southern Natural
Gas Company, El Paso Energy International Company, El Paso Field
Services Company, and El Paso Production Company. The company owns
North America's largest natural gas pipeline system, in terms of both
throughput and miles of pipeline, and has operations in natural gas
transmission, merchant energy services, power generation, international
project development, gas gathering and processing, and gas and oil
production. The company is headquartered in Houston, Texas and has over
$19 billion in assets.
Reliant Energy (NYSE: REI), based in Houston, Texas, is an
international energy services and energy delivery company with
$15.3 billion in annual revenue and assets totaling $28 billion.
The company has a wholesale energy trading and marketing
business that ranks among the top five in the U.S. in combined
electricity and natural gas volumes and has a presence in most
of the major power regions of the U.S. Reliant Energy also has
power generation and wholesale trading and marketing operations
in Western Europe. The company has more than 26,000 megawatts of
power generation in operation in the U.S. and Western Europe.
Southern Company Energy Marketing is jointly owned by
Southern Energy Inc. and Vastar Resources Inc. Southern Company
Energy Marketing provides energy marketing, risk management and
financial services and other energy-related commodities,
products and services to customers in North America. Southern Energy's parent company, Southern Company (NYSE: SO), is the
largest producer of electricity in the United States.
||BP (NYSE: BPA) is one of the world's
largest companies and a leader in energy and petrochemicals, with 1999
revenues of over $101 billion. The company's main activities are
exploration and production of crude oil and natural gas; refining
marketing, gas marketing, supply and transportation; manufacturing and
marketing of petrochemicals; and growing activity in solar power
generation. BP has well-established operations in Europe, North and South
America, Australasia and parts of Africa.
||With over $953 billion in assets as of March 31,
2000, and approximately 90,000 employees, Deutsche Bank offers its clients
unparalleled financial services throughout the world. It ranks among the
leaders in asset management, capital markets, corporate finance, custody,
cash management and private banking. Deutsche Bank is divided into five
major business units: Global Corporates and Institutions, Global
Technology and Services, Asset Management, Corporates and Real Estates and
Private and Retail Banking.
Goldman Sachs (NYSE: GS) is a leading global investment
banking and securities firm, providing a full range of
investing, advisory and financing services worldwide to a
substantial and diversified client base, which includes
corporations, financial institutions, governments and high net
worth individuals. Founded in 1869, it is one of the oldest and
largest investment banking firms. The Firm is headquartered in
New York and maintains offices in London, Frankfurt, Tokyo, Hong
Kong and other major financial centers around the world.
STANLEY DEAN WITTER
Morgan Stanley Dean Witter & Co. (NYSE: MWD) is a
preeminent global financial services company and a market leader
in securities, asset management, and credit services. The
company's top-ranked research along with world class product
origination, asset management and other extensive resources
create a unique combination of capabilities that provide both
individual and institutional clients with access to the most
comprehensive array of high quality products and services in the
financial services industry today. The Company has offices in
New York, London, Tokyo, Hong Kong and other principal financial
centers around the world, and has 506 branch offices serving
individual investors throughout the United States.
The Royal Dutch/Shell Group of Companies - usually
known as Shell - has grown out of an alliance made in 1907
between Royal Dutch Petroleum Company in the Netherlands
and the "Shell" Transport and Trading Company in
the UK. Today the Group has five core businesses: Exploration
& Production, Oil
Gas & Power Generation, and Renewables.
SG Investment Banking is the commercial and investment banking arm of the
Société Générale Group. Present in over 60 countries and with expertise
in capital markets, advisory and origination services, structured finance
and commercial banking. SG Investment Banking builds innovative, integrated
financial solutions for its corporate, institutional and public sector
clients. More information about the company is available on the Internet at:
The Totalfina Elf Group is now one of the largest private
sector oil and gas companies in the world, with a world-class
business in chemicals.
|CONTINENTAL POWER EXCHANGE, INC.
Continental Power Exchange was started in 1994 by a US electric
utility company to create a spot market exchange for electric
power, primarily in the MidWest US. In 1997, the company was
purchased by a private investor and, under the leadership of a new
management team, dramatically expanded its scope of interest by
initiating the in-house development of an electronic trading
system for the real-time purchase and sale of a large array of
commodities and derivative products. The company completed the
initial work on its proprietary software in early-2000 and
approached a number of major commodities trading firms to provide
initial liquidity - out of which was born InterContinental
Dorien van Boven or JoAnn Healy, Trimedia Inc.
Tel. (212) 888-6115 x231 x226