June 19, 2015 - Calgary, Alberta - National Energy Board
Lower prices, ample supply, and increased competition in key markets will challenge the competitiveness of Canadian natural gas and gas exports, says the National Energy Board’s latest natural gas deliverability market assessment, released today.
The Short-term Canadian Natural Gas Deliverability, 2015–2017 Energy Market 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 assessment finds that despite the declining prices in the second half of 2014, Canadian and U.S. natural gas deliverability continued to increase, 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 U.S. 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 liquefied natural gas (LNG) export projects.
In a Mid-Range Price Case, prices would fall from $4.35/MMBtu in 2014 to $3.55/MMBtu in 2017, but lower costs and higher performing wells keep Canadian natural gas deliverability relatively flat at 416 106m³/d (14.7 Bcf/d) in 2014 and 417 106m³/d (14.7 Bcf/d) in 2017.
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. For more information on the NEB and its mandate, please visit www.neb-one.gc.ca.
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For further information:
Craig Loewen
Director, Media Relations and Public Affairs
E-mail: Craig.loewen@neb-one.gc.ca
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For a copy of the Report:
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Email:library@neb-one.gc.ca
