RE:RE:RE:RE:RE:BC Natural Gas Partnership Future trends
In the assessment, the NEB also identifies recent issues and current trends, including the focus on drilling liquids-rich wells. This has increased NGL supply in Canada and the U.S. to the point where the prices of some NGLs have fallen, tracking closer to lower-priced natural gas than being indexed to higher-priced crude oil, it says.
“If this leads to a reduction in targeting NGL-rich wells, further slowing of natural gas production growth may occur,” according to the study.
“However, some western Canadian natural gas wells, such in the Duvernay shale, produce condensate, whose demand is expected to continue to increase as oilsands production increases,” it says. “Further, propane storage that was also significantly depleted because of the cold winter could buoy NGL prices.”
The speed at which additional pipeline capacity is added out of the Marcellus and Utica shales in the U.S. is also a key factor in the integrated Canadian/United States gas market, says the report, pointing to shrinking markets for Canadian natural gas as growth in U.S. gas supply displaces some Canadian gas from Central Canada and from export markets in the U.S.