October 11, 2024
Canadian natural gas firms eager for LNG boom swamp market with excess supply
By Nia Williams
The LNG Canada terminal, led by Shell, is set to start exporting in 2025, creating new demand for Canadian natural gas. However, analysts suggest this may not significantly raise gas prices due to a backlog of supply. Current low prices have already led some producers to curtail production, as Alberta’s AECO gas prices hit a low recently. Companies like Canadian Natural Resources and Advantage Energy are holding back on production until prices improve.
LNG Canada will need around 2.1 billion cubic feet of gas per day, yet AECO futures suggest only a moderate price rise by 2025. There is concern that producers may reintroduce withheld supply too quickly when prices rise, potentially pushing prices back down. Peyto Exploration, for instance, is hedging against volatility, while analysts say LNG Canada’s demand might stabilize but not dramatically boost AECO prices.
Read the full article here: Reuters - Canadian natural gas prices fall to two-year low as storage fills | RBN Energy
