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Overview
As a leading international natural gas marketer, Sempra Energy Trading
maintains an active presence in natural gas fixed for floating swaps,
basis, options, and other pricing benchmarks. SET works with natural
gas producers, pipelines, and consumers around the world, managing supply
and transportation assets in order to provide customers with expert
delivery service.
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Supply Side Capabilities
Power Generators:
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For an IPP in Texas, Sempra Energy Trading
manages their throughput, assets and contracts, and advises
them on market conditions and price and credit risk.
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For a major merchant plant developer, we helped
hedge output, paying for call options on undersubscribed output
and we aided them in marketing their output.
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We have negotiated numerous tolling deals,
where we bought fixed-price power with the option to take gas
instead of power.
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For a large Northeast utility, SET structured
a tolling transaction that helped monetize their capacity and
guarantee a return by hedging the spark spread.
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In Florida and the Northeast, we helped monetize
fuel switching capacities by paying up to $0.30 per MMBtu for the
ability to supply natural gas or fuel oil.
Gas Producers:
-Natural gas requirements for six independent power plants in
California.
-Marketing agreements in place to sell excess power for a number
of gas-fired, paper pelletizer plants, and coal/oil plants.
-Tolling arrangements with merchant power plants.
Swing Option Offering: A major gas producer in
Europe received "over the market" price for gas per therm in return
for SET's ability to take the gas at varying times during a year; an example
of how a producer who is "long" an asset can monetize and receive a
premium for swing.
Exotic Option Offering: A "rainbow" option is
an example of SET's innovative thinking in which we paid considerably
above market for an oil swap with the right to call on either a specified
quantity of gas or oil at a pre-specified strike price.
Demand Side Capabilities
Utilities:
Sempra Energy won a
Mexican electric utility's bid to construct a gas pipeline and
supply gas to a proposed group of power plants. In this ten-year
arrangement, the value of the gas is expected to exceed $1 billion.
We provide the utility with daily and quarterly flexibility in the
amount of gas it can take. This flexibility has "option value"
in the market.
Cities & Municipalities:
We are the energy resources
manager for several cities in California, managing and scheduling
all load requirements. We act as the coordinator in interfacing
with the California ISO and the California PX and help insure that
the cities are protected against price spikes. In addition, we
manage physical assets, long-term resources contracts and administer
load-forecasting, metering and real-time load tracking.
Load Aggregators:
SET supplies gas and power to prominent load aggregators in North America.
Industrial and Commercials:
Sempra Energy Trading,
along with sister Sempra Energy companies, signed a comprehensive
national energy services contract with Lockheed Martin. The
partnership is resulting in significant energy cost reduction at
the corporation's facilities in 26 states. Included in the
agreement are energy-efficient retrofit projects and water
conservative services.
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