NEB: Canadian gas deliverability to decline

By OGJ editors

Deliverability of natural gas in Canada will decline during 2012-14 but remain “well above” domestic demand, says the National Energy Board.

A new report by the federal agency defines “deliverability” as “the estimated amount of gas supply from a given area based on historical production and individual well declines, as well as projected activity.” Production can be less than deliverability because of factors such as weather-related supply interruptions and curtailments undertaken for economic or strategic reasons.

Average Canadian gas deliverability in 2011 was 14.6 bcfd. The Alberta gas price last year averaged $3.28/GJ (Can.).

In a midrange case in NEB’s projection, assuming gas prices of $3.11/GJ in 2012, $3.51/GJ in 2013, and $3.69/GJ in 2014, deliverability falls to 14.5 bcfd in 2012, 14 bcfd in 2013, and 13.2 bcfd in 2014.

In a case assuming higher prices—$4.12/GJ in 2012, $4.53/GJ in 2013, and $5.22/GJ in 2014—deliverability stays at 14.6 bcfd in 2012 but falls to 14.2 bcfd in 2013 and 13.6 bcfd in 2014.

And with lower prices—$1.86/GJ in 2012, $1.98/GJ in 2013, and $2.15/GJ in 2014—deliverability slumps to 14.1 bcfd in 2012, 13.1 bcfd in 2013, and 12 bcfd in 2014.

In all cases, deliverability remains above projected Canadian demand of 9.2 bcfd in 2012, 9.4 bcfd in 2013, and 9.8 bcfd in 2014. Demand averaged 8.9 bcfd last year, NEB says.

NEB notes that drilling targeting dry gas has fallen as gas has lost value relative to oil with supply rising in response to North American shale-gas development.

Until 2006, 70-80% of wells drilled in Canada sought gas. The gas share has slumped since then and last year amounted to only 37%.

“Levels of natural gas drilling in Canada over the 2012 to 2014 period will likely not be adequate to offset ongoing declines in output from existing producing wells,” NEB says. “Even though new wells a producing natural gas at higher initial rates, overall deliverability is likely to decrease.”

Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now

Whitepapers

Maximizing Operational Excellence

In a recent survey conducted by PennEnergy Research, 70% of surveyed energy industry professional...

Leveraging the Power of Information in the Energy Industry

Information Governance is about more than compliance. It’s about using your information to drive ...

Reduce Engineering Project Complexity

Engineering document management presents unique and complex challenges. A solution based in Enter...

Revolutionizing Asset Management in the Electric Power Industry

With the arrival of the Industrial Internet of Things, data is growing and becoming more accessib...