Canadian gas gains market share in US

Oct 02, 1998 02:00 AM

After years of stagnating, Canadian natural gas is finally expected to get a bigger share of the huge US market, thanks to newly expanded export pipelines and languishing US production growth, Canadian energy analysts say.
Canadian supplies are expected to make up more than 17 % of all gas consumed in the US by 2001, up from just under 14 % in 1997, said Roland George, natural gas analyst with Purvin & Gertz.
To achieve that figure -- an increase from just 4 % when the natural gas industry was deregulated in 1986 -- Canadian producers are set to drill an unprecedented number of gas wells each year.
"From deregulation to now, we've nearly quadrupled exports to the United States," George said. "Because of the export capacity constraints over the last few years, we've kind of tapered off. But now with these new projects coming on, market share will be increasing."

Studies indicate net exports of Canadian gas are expected to total 3.1 tcf in 1998; 3.4 tcf in 1999; 3.7 tcf in 2000 and 4 tcf in 2001.
In 1997, Canadian gas producers shipped 2.9 tcf of gas to the US
Meanwhile, US gas demand, expected to total between 21 and 22 tcf this year, is expected to grow at an average rate of 2.1 % a year for the next 4 years, based on projected increases in economic activity and growth in the use of gas to fuel electricity generation, he said.
Most of the increase in Canadian exports is expected to be in supplies from Alberta and British Columbia shipped to the US Midwest market, on pipelines like Northern Border Pipeline Co.'s system to Chicago from the Saskatchewan-Montana border.
A 700-mm-cfpd expansion on that line is slated to be completed early this winter, as is an addition of 400 mm cfpd of new capacity on TransCanada PipeLines Ltd.'s Canadian mainline, which serves markets in eastern Canada and feeds gas into the US
Together, the 2 projects -- expected to result in a long-awaited rise in gas prices after years of glut within Canada -- will boost export capacity by about 14 %.
Gas from the Sable Offshore Energy Project off the coast of Nova Scotia in the east is slated to add to Canadian exports further at the turn of the century.

Another analyst said Canadian gas producers will further their inroads into the huge market south of the border as US production growth falls amid fewer new drilling prospects.
"As our decline rates are accelerating, the Americans' are too, especially in the shallow waters of the Gulf of Mexico, because the pools that have been drilled in the last couple of years tend to be much smaller," he said.

In western Canada, where overall drilling is down because corporate cash flow has been eroded by low crude oil prices, gas producers will likely struggle in coming months to drill enough wells to fill the new pipeline space.
"We're anticipating that, sustainably over the next 5 to 10 years, we'll need something like 6,000 (gas) wells a year, which will be record drilling year in, year out, compared to anything that's been done historically in Canada."
Achieving that heavy drilling activity will require a jump in exploration in north-western Alberta and north-eastern British Columbia, where gas reservoirs are larger and produce at high rates for longer periods, but are more expensive to develop.
He believes Canadian producers would drill 4,600 gas wells in 1998, but crank up activity next year. "Our estimates are about 6,700 wells in 1999."

Source: not available
Market Research

The International Affairs Institute (IAI) and OCP Policy Center recently launched a new book: The Future of Natural Gas. Markets and Geopolitics.


The book is an in-depth analysis of some of the fastest moving gas markets, attempting to define the trends of a resource that will have a decisive role in shaping the global economy and modelling the geopolitical dynamics in the next decades.

Some of the top scholars in the energy sector have contributed to this volume such as Gonzalo Escribano, Director Energy and Climate Change Programme, Elcano Royal Institute, Madrid, Coby van der Linde, Director Clingendael International Energy Programme, The Hague and Houda Ben Jannet Allal, General Director Observatoire Méditerranéen de l’Energie (OME), Paris.

For only €32.50 you have your own copy of The Future of Natural Gas. Markets and Geopolitics. Click here to order now!


Upcoming Conferences
« October 2018 »
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30 31

Register to announce Your Event

View All Events