SuperDerivatives (SD), the derivatives benchmark, has joined forces with Athena Energy Marketing (AEM), a leading supplier for natural gas users in Eastern Canada, to increase transparency in Canada's natural gas derivatives market.
Consumers procure natural gas supply from AEM as an alternative to local utilities, giving them access to competitive pricing for the commodity for up to five years. It is essential that AEM has access to the right tools to determine the real market price of natural gas derivatives that support the workflow throughout the lifecycle of a deal. This will ultimately improve AEMs ability to hedge risk.
"There is a genuine market need to increase transparency and improve technology within the entire commodities market. This goal is further cemented by our commitment to provide real-time, intra-day pricing," said Leor Jivotovsky, commodities product manager, SD. "In this instance, the Canadian natural gas market remains extremely volatile. Data latency has become a significant problem for participants because intra-day movements mean that end-of-day data is not accurate enough."
AEM and its affiliate Athena Energy Management Canada (AEMC) chose SD's commodities and energy real-time solution, SD-CM, for its pricing and analytics capabilities for Aeco & NIT Hub in Alberta, portfolio management and decision support tools. The SD implementation will enhance the companies' gas marketing and services efforts.
Athena will access mark-to-market prices and risk data for derivatives structures, and provide indicative quotes. It will also be able to hedge more effectively against fluctuations in the natural gas market, ultimately improving the service level for customers. In addition, AEMC's risk management committee will be able to assess the effectiveness of its Alliance hedging program and its portfolio management decisions.
Robert Bédard, President of Athena Energy, said, "Athena is committed to increasing transparency in the natural gas derivatives market in Canada, and actively encourages consumers to seek out tools to improve their risk management. To increase our level of service to customers, we needed a tool that ensured we had access to accurate prices for Aeco & NIT Hub (in Alberta), both for intraday and settlements, as well as a good indicative tool for derivative products. We surveyed the market and SD stood out for its wide coverage and accuracy of information. The strategic collaboration with SD will help improve our level of service to customers and enable us to provide all our clients with better risk management tools and pricing option accessibility, usually only available to larger organizations."
The Athena group of companies provides natural gas supply and price management services for all market segments, i.e. commercial, industrial and institutional consumers, in Eastern Canada.
AEM, part of the Athena group, provides natural gas for consumers whom utilization vary from 7,500 m³ to 3,000,000 m³ per year - a segment sometimes disregarded by large multinational suppliers.
SD provides accurate, real-time market prices, risk management and analytics for swaps and all types of options for an extremely wide range of traded commodities and energy products. It uses real-time price feeds from global commodity exchanges, price indications from OTC brokers on a selection of markets and price indications from banks and energy companies. All data is run through a unique, market-accurate pricing methodology to provide fair market value with bid and ask prices for the widest range of derivatives structures.