Cornerstone research analyses 2012 US natural gas transactions

US natural gas trading volumes as reported to the Federal Energy Regulatory Commission (FERC) are down 5% in 2012 compared with the previous year, marking a reversal in a two year trend of increasing activity.

However, the number of natural gas futures, options, and over the counter contracts trading on IntercontinentalExchange, Inc. (ICE) in 2012 is up more than 10% compared with the previous year.

Comments

Dr. Greg Leonard, Vice President of Cornerstone Research

Like previous yearly FERC submissions, the natural gas industry remains unconcentrated, with the top 20 companies accounting for slightly less than half of transaction volume. The exposure of companies reporting to price indices is roughly equal, with approximately 41% of companies as net sellers and 54% of companies as net buyers.

Key findings:

• Natural gas transactions reported to FERC is 5% lower in 2012 than 2011. However, transaction volume is still 2% higher than in 2010.
• The number of natural gas contracts traded on ICE is up by more than 11% in 2012.
• The top 20 transacting companies by volume account for slightly less than half of the transaction volume covered in the Form 552 submissions. Traders of wholesale marketers continue to report the largest transaction volumes, accounting for approximately 43% of transaction in 2012.
• Reporting to price index publishers is not consistent across industry segments. Integrated upstream and integrated downstream companies, along with traders or wholesale marketers, report most of eligible volume to the price index publishers, whereas industrial or commercial consumers and chemical consumers report less than 10% of their eligible volume.
• Reported volumes from net buyers and sellers were approximately equal from 2008 – 2010. However by 2011, 58% of reported volumes originated from net buyers, yielding a disparity of approximately 20 percentage points. This gap was narrowed in 2012 to less than 13 percentage points.
• An average molecule of gas passes through approximately 2.63 transactions from production to consumption.

Adapted from press release by Emma McAleavey.

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/27062013/cornerstone_research_analyses_2012_us_natural-gas-transactions/