01/17/2009 |

Natural Gas Exchange Inc. subsidiary, or NGX, which acts as a clearinghouse for natural gas and electricity contracts.

"With Houston being the energy capital in the U.S., we needed local representation in this market,"

Frye is leading NGX's efforts to set up access points at trading locations around the country in heavy-traffic pipeline areas where natural gas contract trades occur.

The company's third U.S. trading location opened in April at Henry Hub in Louisiana, the key price point for natural gas futures contracts traded on the New York Mercantile Exchange. NGX handles the physical and financial services during a transaction, charging customers a fee when trades are concluded.

NGX expects to add as many as 24 of these U.S. natural gas trading point locations during the next two to three years, according to Peter Krenkel, NGX president.

TSX Group, which operates the Toronto Stock Exchange, has made two big moves this year to beef up its energy trading presence.

The group teamed up with IntercontinentalExchange Inc., also known as ICE, in February to move NGX's physical natural gas contracts in North America and Canadian electricity contracts onto the ubiquitous ICE electronic commodities software trading platform.

Krenkel says he expects NGX to see a major revenue bump in 2008 as the company rolls out its services.

In the first three months of this year, TSX Group reported energy market revenue of $6.6 million Cdn., a 38 percent gain over the first quarter of 2007. The volume of natural gas and electricity contracts traded or cleared on NGX increased by 54 percent in the first quarter.

"We transact about 70 percent of physical gas flow on the Canadian side, and we're looking to do similar services in the U.S. There aren't really any other physical clearing services set up like that," Krenkel says. "We're the predominant player in Canada and ICE is dominant in handling U.S. transactions."



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