CALGARY, May 9, 2013 /CNW/ - The National Energy Board (NEB or Board)
released its natural gas deliverability energy market assessment
indicating that Canadian natural gas producers are undertaking minimal
natural gas drilling activity as current prices do not cover the full
costs of developing most natural gas prospects.
In the report, Short Term Natural Gas Deliverability 2013-2015, the NEB examines trends for natural gas deliverability in Canada (the
ability to produce natural gas from new and existing wells). The three
key supply and demand drivers influencing future Canadian natural gas
Minimal drilling activity because prices do not cover the costs of
developing most natural gas prospects.
Growth in natural gas as a by-product from developing oil and natural
gas liquids (NGLs)-rich prospects.
Producers are not earning sufficient returns to attract additional
equity investment with current prices of around $3.00/MMBtu in Western
This report includes lower, mid and high range price cases for natural
gas based on varying market factors. A mid-range price case would see
moderate growth in North American natural gas demand, coupled with
declining Canadian natural gas deliverability and slowing U.S. supply
growth, gradually reducing excess deliverability in North American
natural gas markets.
The Board projects annual Canadian natural gas prices could be $3.60/GJ
by 2015 and sustain drilling for NGL-rich gas and incent the beginnings
of some return to dry gas drilling. Canadian natural gas deliverability
would fall to 353 106m3/d (12.5 Bcf/d) by 2015, down from 396 106m3/d (14.0 Bcf/d) in 2012.
The National Energy Board is an independent federal regulator of several
parts of Canada's energy industry with the safety of Canadians and
protection of the environment as its top priority. Its purpose is to
regulate pipelines, energy development and trade in the Canadian public
SOURCE: National Energy Board
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