A widely watched US midstream initial public offering has been shelved.
Meanwhile, one of Japan's biggest refiner-marketers is mulling going public for the first time.
Midstream IPO
Duke Energy Field Services, Denver, postponed plans for an IPO of common stock earlier this month, citing volatile market conditions.
The company, owned by Duke Energy Corp. and Phillips Petroleum Co., said shares of DEFS, one of the largest US natural gas gatherers and one of the largest producers and marketers of NGL, will be offered to the public when market conditions improve. In the meantime, DEFS will continue to be owned 69.7% by Duke and 30.3% by Phillips.
Duke and Phillips reached a definitive agreement to merge Duke's gas gathering and processing business-DEFS-with Phillips's gas processing and marketing unit, GPM, in January (OGJ, Jan. 3, 2000, p. 24). The resulting midstream company retained the Duke Energy Field Services name. The new company, with an enterprise value of $5-6 billion, planned to offer about 20% of its equity to the public.
At that time, officials said existing NGL arrangements between Phillips and its gas processing and marketing unit would be maintained by the new company for 15 years. DEFS operates in 11 states, owns and operates 70 plants and 57,000 miles of pipelines, and has an estimated 17 tcf of contracted gas supply. Plans called for processing about 5 bcfd of raw gas and producing 400,000 b/d of NGL.
Japanese R&M listing
Japan's fourth largest refiner-marketer, Idemitsu Kosan Co. Ltd., is considering a share listing. "We are thinking of listing our shares, although we do not have a target date," Pres. Akira Idemitsu told reporters in Tokyo, adding the firm will set up a working committee on the subject. Idemitsu Kosan recently announced plans to raise its capital to
As of Mar. 31, Idemitsu had an estimated
Analysts tentatively welcomed the move, expressing hope it would lead to greater transparency. "Idemitsu has not exactly been renowned in the past for the transparency of its accounting. This will change, particularly if it does decide to go public, giving us a much clearer picture of the exact state of its financial health," said an industry analyst.
Increased worldwide crude oil prices and the inability of Japanese refiner-marketers to fully pass on the increase to customers have sharply eroded refiners' margins.
The capital increase will be Idemitsu's first in 37 years. In an industry struggling with low margins, the company has chosen to maintain its independence to survive; Akira Idemitsu recently reiterated his company is not thinking of a merger.
Idemitsu has 720,000 b/d of capacity in five refineries.
