Views mixed on plan for natural gas 'bulletin board'; enthusiasm vies with wariness over trading network.

Producers, marketers, transporters, municipal utilities and industrial users of natural gas around the county will soon have a new tool to help them transact their business.

The New York Mercantile Exchange announced Oct. 20 that it would create an electronic bulletin board network to help the natural gas industry contract for the physical commodity and capacity to transport it, as well as comply with federal reporting requirements.

An electronic bulletin board network is a computerized service that allows people in different locations to send and receive information through one source, explained Mark Klein, spokesman for EnerSoft Corp.

The Houston-based software firm has contracted to develop and operate computer programs that will link new and existing bulletin boards provided by pipelines and other industry sources through the NYMEX network. According to Klein, users will be able to access information from their own computer terminals in their own offices.

"It's a real positive for the industry," said Bill Horton, manager of the Arco Gas subsidiary of Los Angeles based-Atlantic Richfield Co. He said the network will let users know what prices are bid and offered in various parts of the country. It will also enable users to broker the space on pipelines (capacity) used to transport natural gas.

Gregory Craig, president of Century City-based Cook Inlet Energy Supply, was equally enthusiastic.

"This is a real opportunity for us," said Craig, who heads the largest minority-owned natural gas marketing company in the country. Cook Inlet buys and sells natural gas from producers and sells to local distribution companies and large end-users.

Craig said that, although he believes the new tool will provide better information for his needs, it may be a bit overwhelming for his clients. Bulletin boards, explained Craig, "can be a little intimidating unless you understand what they mean."

The NYMEX program is not the only one to link electronically generated information from various gas industry sources.

In Houston, IBM's ISSC subsidiary has been running an electronic bulletin board service called CapFinder since July 1.

"We are an interactive bidding system for capacity on (five) natural gas pipelines," explained Frank Lusk, CapFinder's program manager. "We are not a market maker for natural gas as a commodity."

Ross Perot's Perot Systems Corp. had also talked extensively about developing an electronic means of linking and reconfiguring information for the industry, said associate Bill Baksi. The Houston-based company backed off, he said, because "the market is not developed as completely as necessary."

Despite this, he said he believes "a secondary market in capacity trading should exist," and he did not rule out a joint venture to develop such a system in the future.

Fred Pickel, a purchasing consultant for downtown L.A.-based Virtual Energy Corp. advisory service, said he thinks the NYMEX network will incorporate much of the work already undertaken by these other ventures.

Arco's Horton added that NYMEX's third-party status has more credibility than a vested interest like a pipeline joint venture would have. Furthermore, he noted, "the NYMEX would have a huge advantage because (its presence in) the futures markets adds a legitimacy to what they're doing."

NYMEX, which claims to be the world's largest energy market, said trading in its natural gas futures contracts has grown faster than operations for any other commodity it oversees. Exchange President R. Patrick Thompson said the electronic bulletin board network, which is geared toward deals of 30 days or less, is an extension of NYMEX's commitment to the natural gas industry.

Regarding EnerSoft as the system's operator, "people in the industry," reported the trade publication Gas Daily, are "reluctant to endorse the (network) concept until NYMEX and its partner can prove the operator of the system won't use information against them." EnerSoft is a wholly owned subsidiary of New York State Electric & Gas Corp.

Horton said he didn't see any problem with the EnerSoft connection, believing sufficient controls will be in place. "Otherwise," he concluded, "no one will use it."

Chris Stroud, a technical specialist for end-user SCEcorp, said it was too early to comment due to questions about the service's cost and the number of sources submitting bulletin board information. Rosemead-based SCECorp, parent of Southern California Edison Co., buys natural gas from producers and marketers to fuel some of its plants that generate electricity.

Patrick Brown, gas acquisition manager for downtown L.A.-based Southern California Gas Co., is also concerned about the scale of the project. SoCal is a major buyer, reseller and transporter of natural gas.

"The early indications that I've heard," said Brown, "are that they don't have enough people -- suppliers and users -- on board."

Although selling the system to enough participants seems a formidable roadblock, Brown said, "if they can pull it off I think we can all benefit from it."

The NYMEX network is scheduled to begin operation April 1, 1994, when natural gas pipeline companies will be required by Washington's Federal Energy Regulatory Commission to provide information on tariffs, available pipeline capacity, and service disruptions through electronic bulletin boards.

The network also intends to post bids, offers and completed deals for physical natural gas supplies and pipeline services from anonymous suppliers, transporters and producers nationwide.