LNG CanadaLNG Canada will boost exports of natural gas from Western Canada by 20 per cent when it begins commercial operations in mid-2025, BMO Capital Markets analyst Randy Ollenberger recently told a room full of oilfield service contractors at an industry luncheon in Calgary. We think the outlook for natural gas in Western Canada is probably the best since 2005, he said. Because gas has really sucked since then and we think its going to be much better over the next couple of years here. Weve got a very bullish outlook on that. The thesis beginning to grip the sector is that Canadian producers wont be able to drill fast enough or ship in large enough volumes on existing pipeline routes to meet the combined pull on resources from Shell PLC-led LNG Canada and the demand from the oilsands, where natural gas is increasingly used to power thermal production and mining operations. The thesis Ollenberger recently shared in Calgary that ignited hopes among beleaguered gas producers is the possibility that it could take up to three years for Canadian production to catch up with the demand from the first phase of LNG Canada. He said it will take that much time since the combined demand pull from LNG Canada and the oilsands could be as much as 2.5 Bcf/d, whereas the basin might only be capable of supplying another 700 to 800 million cubic feet per day in new gas, potentially propelling AECO to trade near parity with U.S. benchmark Henry Hub gas. We think that AECO is going to be the best performing gas market within North America over the next three years because this increased capacity from LNG Canada is so material, he said. Tourmaline Oil executives are similarly optimistic about the prospects of an AECO rally, with chief executive Michael Rose telling Bloomberg recently that the discount on Alberta natural gas could be cut in half next year. On a recent conference call with investors, Tourmaline chief executive Michael Rose saidthe more than 1.8 Bcf/d in natural gas production required for LNG Canada when it starts up is currently being absorbed into North American markets and that the anticipated pull on volumes next year will trigger a rise in Canadian prices. Weve decided to get the pads drilled out so that we can respond, he said. We think the AECO strip is understating what the impact of the ultimate startup of LNG Canada will do.