Seven energy companies, including subsidiaries of Tulsa-based Williams, Royal Dutch/Shell Group, and Koch Industries Inc. of Wichita, Kan., announced plans Monday to form an online trading platform called TradeSpark LP for natural gas, electricity, coal, weather derivatives, and emission credits.
New York-based eSpeed Inc., a business-to-business e-commerce company, and the seven companies signed an agreement to form an interactive electronic marketplace. The trading site will become operational Oct. 2.
After its launch, TradeSpark will offer three possible points of access�over the internet, through eSpeed's private network, and through TradeSpark voice brokers.
In April, Dynegy and Williams unveiled plans to invest $25 million each in eSpeed in exchange for minority equity stakes in the company (OGJ Online, Apr. 30, 2000).
Partners in the venture include Shell Oil Co. subsidiary Coral Energy; Virginia-based Dominion Resources Inc., Koch subsidiary Koch Energy Trading Inc.; Williams subsidiary Williams Energy Marketing & Trading Co.; TXU Corp. unit TXU Energy Trading; and Cantor Fitzgerald LP, the investment firm that controls eSpeed.
Houston-based Dynegy Inc. will be a future member in the TradeSpark partnership, and will begin participating in the TradeSpark marketplace immediately. Entergy Corp., New Orleans, also plans immediate participation in the marketplace, and will become an investor in TradeSpark through Entergy-Koch LP upon close of that venture later this year (OGJ Online, Apr. 30, 2000).
Some observers suggest the potential value of electronic energy market trading volumes is in the multibillion dollar range. TXU quoted a report by Forrester Research, a Cambridge, Mass.-based research firm, predicting that by 2004, online sales of natural gas will reach $166 billion, representing 25% of all natural gas sales. Forrester projects online sales of electricity reaching $101 billion by 2004, an 11% share of all electricity sales.
During the past year, Dynegy, Entergy, and the partners forming TradeSpark estimate that they traded 34.5 bcf/day of natural gas and 467 million Mw-hr of electricity. For the first quarter 2000, the TradeSpark partners, Dynegy, and Entergy together expect to trade 20% of all gas and power in North America.
