TSX Group Inc. and IntercontinentalExchange, Inc. today announced the formation of a transformative technology and clearing alliance for the North American natural gas and Canadian power markets.

The alliance brings together the respective strengths of TSX subsidiary Natural Gas Exchange Inc. (NGX), Canada’s leading energy exchange and North America’s leading physical clearing and settlement facility, and ICE, the world’s leading electronic energy marketplace and soft commodities exchange.

Under the arrangement, the cleared and bilateral markets for North American physical natural gas and Canadian electricity operated by NGX and ICE will be offered together on ICE’s leading electronic commodities trading platform. In turn, NGX will serve as the clearinghouse for these products.

This will complement the clearing ICE offers in its highly liquid over-the-counter markets for financial contracts. NGX will also use the ICEBlock system to electronically accept for clearing off-exchange transactions in financial gas and other energy products.

NGX has enabled almost $300 billion of physical gas transactions since its inception in 1994. In 2006 more than 8.1 trillion cubic feet of gas traded on NGX.

Hundreds of products are traded daily on ICE’s high performance platform, which operates seven days a week, 23 hours each day. In addition, ICE offers the most liquid, cleared natural gas and power swaps markets in North America.

“This alliance will transform and grow the physical energy markets in North America,” said NGX President Peter Krenkel, in a news release. “We are combining the complementary, proven solutions of two established market leaders, and we’ll be starting with unparalleled market penetration. Combining our physical and financial markets on a single clearing-supported technology platform will provide NGX and ICE customers with greater execution opportunities, together with a more efficient desktop and back office.”

“Our agreement with NGX marks the first time that a suite of physical energy products will be offered in conjunction with the ability to clear these physical contracts on the ICE platform,” said ICE Chairman and CEO Jeffrey Sprecher.

TSX CEO Richard Nesbitt said, “Since acquiring NGX in 2004, TSX has demonstrated a commitment to supporting NGX’s growth beyond Canada, as we expand our own international footprint in the rapidly expanding resources sector. This alliance marks a significant step along that path.”

Other terms of the alliance have not been disclosed. It is not expected to be material for either party in 2007.

The terms include certain usual and customary conditions, including applicable regulatory filings and approvals.

The combined offering is expected to launch in the third quarter of 2007.