North American natural gas market oversupply to continue
Published by Rosalie Starling,
Editor - Hydrocarbon Engineering
Hydrocarbon Engineering,
Lower prices, ample supply, and increased competition in key markets will challenge the competitiveness of Canadian natural gas and gas exports, according to the National Energy Board’s (NEB’s) latest Short Term Canadian Natural Gas Deliverability 2015 – 2017 Energy Market Assessment.
The assessment examines the factors that affect natural gas supply in Canada in the short term, and presents an outlook for Canadian natural gas deliverability from the beginning of 2015 to the end of 2017. The assessment presents a high, mid range and lower price case, to show how supply might unfold under different conditions. In all three cases, the 2015 North American natural gas market will continue to be oversupplied, as deliverability outpaces demand growth.
The NEB assessment finds that Canadian and US natural gas deliverability continued to increase, despite the declining prices in the second half of 2014, refilling the storage deficit caused by colder than average winter weather in 2013 – 2014. While decreased capital expenditures caused by declining oil prices are expected to reduce total deliverability, high grading by producers to pursue the best targets in both Canada and the US may improve per well deliverability.
Additional drilling could occur in Western Canada as some producers may attempt to establish natural gas reserves and assess deliverability potential to confirm supplies for future LNG export projects.
In a mid range price case, prices would fall from US$4.35/million Btu in 2014 to US$3.55/million Btu in 2017, but lower costs and higher performing wells keep Canadian natural gas deliverability relatively flat at 416 106m3/d (14.7 billion ft3/d) in 2014 and 417 106m3/d (14.7 billion ft3/d) in 2017.
Access the Short Term Canadian Natural Gas Deliverability 2015 – 2017 Energy Market Assessment here.
Adapted from press release by Rosalie Starling
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/22062015/north-american-natural-gas-market-oversupply-to-continue-962/
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