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Natural Gas CTRM starting to show strength

I recently caught up with John Decker, Enuit’s sales director for the Americas.  According to Mr. Decker, Enuit is seeing strong sales activities across multiple categories of commodities and, in particular, increasing inbound interest in natural gas solutions from the US, Canada, and Latin America, where the liberalization of gas markets continues to evolve.

This bit of insight from Enuit (and a few other vendors) is pleasantly surprising for us at ComTech as we have seen the market for new natural gas focused CTRM solutions (despite it being one of the largest commodity categories for these types of products) lagging many others over the last 12-18 months, particularly in the US. Mr. Decker believes the interest that they are seeing is in part driven by a lingering hangover from Covid, in that many companies have been relying on in-house developed solutions and are just now going back out to the market to update their software capabilities. He’s also seeing interest in gas and other commodities from companies that are growing dissatisfied with competitors’ systems, particularly those provided by the largest vendors.

He noted in that in North America, “A lot of these systems from the largest vendors are aging and are increasingly expensive to maintain. We think this is driving interest in Entrade as companies are looking for a more ‘out of the box’ product, one that is faster to implement, configurable, and comes with a significant amount of pre-populated data…and, I think another factor in our winning new deals in gas, NGLs, LNG, and crude products is the strength and usability of our logistics capabilities.” In the area of logistics, he noted that former users of other systems for NGLs and crude liquids have consistently commented to him that they have found Entrade to be superior to those other systems for scheduling movements on liquids pipelines.

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It is encouraging that natural gas CTRM buyers do seem to be coming back to the market.  Despite the ongoing demonization of natural gas (and all other hydrocarbons) by some US politicians, regulators, and media, natural gas will undoubtedly continue to play a critical role in the energy mix for decades to come, particularly in light of moderating investments and increasing operational difficulties in the renewables markets (lack of transmission capacity, insurability of new facilities, equipment maintenance issues, etc.). Further, with ongoing geopolitical conflicts driving increased demand for LNG, North American natural gas producers should be well positioned to sustainably grow their businesses and continue to make new investments in their critical trading and risk management infrastructures.