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Overview: Interconn purchases natural gas supplies from major producers and mid-marketers then contracts for space in the interstate pipeline network to provide a delivered product to its customers, the majority of which are located in the Southeastern United States. Its supply consists of conventional gas from the Gulf of Mexico (GOM) and the Appalachian Basin as well as coal bed methane gas (CBM) extracted from land in Alabama. The fact that Interconn is not totally dependent on GOM supply and because it manages a significant amount of contracted natural gas storage, it is insulated from temporary supply interruptions in the GOM. Natural gas supply is a mixture of term and spot gas with fixed and current market pricing. Fixed pricing is based on the New York Mercantile Exchange (NYMEX) commodity futures and cash prices and spot pricing is tied to monthly and/or daily published indexes specific to the pipeline that delivers to the customers. The Company also provides customers with storage options, financial products and the flexibility to convert from one pricing mechanism to another when pricing meets customer budget objectives. Interconn sells and transports gas to customers via multiple interstate natural gas pipelines and coordinates deliveries from those pipelines through local distribution company pipelines and ultimately to its customers. Customers are municipal systems that buy to resell, industrial facilities that require natural gas for steam production and processing needs, government and power generating complexes for heat and the generation of electricity, and commercial customers such as restaurants and hotels. Its customers represent a broad base of industries with a wide range of requirements from small to very large users. All of these customers expect, and Interconn provides, the coordination of competitively priced supply, transportation, and storage services twenty-four hours a day, seven days a week. Commodity Price Monitoring: Interconn monitors real-time commodity prices through its suppliers and electronic access to the New York Mercantile and Intercontinental Exchanges. Additionally, it makes the previous day's NYMEX and daily spot prices on several pipelines available to its customers via email or facsimile. This includes monthly indexes for select pipelines. This is the most reliable commodity information available in the industry and allows Interconn to respond to pricing requests and execute customer orders promptly.
Pipeline Rate and Operations Monitoring: Interconn is connected to several pipeline electronic bulletin boards which gives it up to date information about the status of any proposed rate changes as well as the operational conditions of the pipelines. Rate change information may include changes to the demand and commodity components of the rates or changes to surcharges and fuel retention rates. Operationally, Interconn operations personnel can assess the likelihood of operational flow orders and notify customers immediately when orders are issued. System receipt and delivery balances and storage levels are also important data used in evaluating customer options.
Commodity and Transportation Price Risk Management: Using the information from the sources referenced above Interconn can provide numerous commodity and transportation pricing options for its customers. Interconn can help customize a purchase strategy by working with the customer to identify its overall objectives and selecting options that meet its risk profile. Controlling price volatility is a critical objective of customers and Interconn offers fixed commodity and transportation pricing to alleviate volatility. Fixed commodity pricing is based on the current NYMEX prices and can be obtained for a month or for multiple years. Fixed transportation pricing can be Firm or Interruptible and is based on the prevailing market for the delivering pipeline at the time of purchase. Monthly and daily index commodity pricing and spot transportation rates are available as are options, caps, and other creative methods of meeting customers' needs.
Operations Management: Interconn can handle any or all of the operations work necessary to take receipt of and deliver the gas to the customer as efficiently as possible. Its operations personnel are trained on several pipelines and have established working relationships with each one. Operations include nominating and scheduling with the pipeline and balancing supply receipts with customer deliveries.
Asset Management: Acting as Agent for customers who hold pipeline storage and transportation assets in their name, Interconn can use it's knowledge, experience and contacts to maximize the value of these assets and return value to the customer through supply discounts, revenue sharing, or other mutually beneficial programs. With so many complexities involved in trading around pipeline assets, Interconn is better equipped to provide risk-free options for the customer.
Customized Invoicing: Interconn recognizes that the structure of one invoice doesn't necessarily meet the needs of all customers. Therefore, it works with each new large commercial and industrial customer to customize an invoice that provides pertinent information in an understandable format. This speeds the accounts payable process for the customer without the need for additional information.
Legal Assistance: When legal representation is necessary for energy issues including pipeline cases before the Federal Energy Regulatory Commission (FERC), Interconn turns to the Washington attorney who has assisted it for many years in such matters. He is a former FERC staff attorney at an experienced and reputable firm with a keen understanding of the federal energy legal system. Interconn makes his services available to all of its customers on a fee basis.
Backup Fuel/Fuel Systems: Interconn can provide propane fuel to those interruptible customers who choose to switch to propane during times of pipeline capacity restrictions or when it is economical. Propane is shipped on separate underground pipelines to the terminal closest to the customer then trucked to the customers' storage tanks. By providing an alternative fuel, Interconn provides one stop fuel shopping for duel fuel customers. Interconn also has extensive experience in providing economic analysis of the installation of a back-up fuel system and can provide advice and off budget financial assistance when requested.
Producer Services: Interconn uses its extensive market knowledge and relationships with various producers, pipelines, and end users to ensure a competitive advantage for our producer clients. Interconn offers expert advice on pipeline connection options, risk management services, pricing and hedging options, and various ancillary services to obtain the maximum value for our producer clients. |
"Interconn Resources, Inc. supplies approximately three billion cubic feet
of natural gas per year to the Sylacauga Utilities Board and, as our
agent, manages all of our pipeline storage and transportation
capacity. Interconn’s service has always exceeded our expectations.
They are personable, accessible at all times, and prompt to respond to
any inquiry. We would highly recommend Interconn."
"Miami-Dade Water & Sewer Department (M-D WASD) has been purchasing its natural gas
from Interconn Resources for over five (5) years. This gas is used in lime kilns to create very
high temperatures for an additive to the drinking water. Accordingly, it is extremely important
that a reliable and dependable supply of gas be delivered on a 24/7 basis. Interconn has
performed this task in an exemplary manner, especially during the difficult period of August
2005 when hurricanes knocked out much of the natural gas supplies in the Gulf of Mexico
and the State of Florida. We are pleased to say that the M-D WASD did not experience
any gas curtailment during this period." |
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