National Energy Board expects a holding pattern for Canada's natural gas producers

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 deliverability include:

  • 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 Canada.

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 interest.

SOURCE: National Energy Board

For further information:

Ruth Anne Beck (Ruthanne.beck@neb-one.gc.ca)
Communications Officer
Telephone: 403-299-3633
Telephone (toll free): 1-800-899-1265
Facsimile: 403-292-5503
Facsimile (toll free): 1-877-288-8803
TTY (teletype): 1-800-632-1663


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890