Natural gas production in Western Canada seems to be cursed during the month of May! Using data from RBN’s Canadian NatGas Billboard, Western Canadian natural gas production has plunged 1.3 Bcf/d (~7%) between May 5 and May 7 (blue line inside of red dashed box in chart below). This is taking place at almost exactly the same time as wildfires in May (and later June) 2023 were forcing shut-ins of natural gas production across Alberta and British Columbia (BC). Are fires to blame this time around? Most certainly not. Cold and damp weather has been persisting across Western Canada during April and May this year, so fires are fewer and less intense and not creating any shut-ins.
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Shock to the System - Alberta's Ethane Demand to Soar with Approval of New Dow Ethane Cracker
The demand for ethane by Alberta’s petrochemical industry has experienced a slow expansion in the past 20 or so years. However, that demand is likely to increase sharply by the end of the decade now that Dow Chemical has sanctioned a major expansion at its operations in Fort Saskatchewan, AB, that will more than double the site’s ethane requirements. As we discuss in today’s RBN blog, this will call for an “all-hands-on-deck” approach to increasing Alberta’s access to ethane supplies from numerous sources.
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He Ain't Heavy, He's My (Diluent), Part 2 - The Pipeline Networks that Source Diluent for the Oil Sands
The folks who transport bitumen from the Alberta oil sands to faraway markets depend on light hydrocarbons collectively known as diluent to help make highly viscous bitumen flowable enough to be run through pipelines or loaded into rail tank cars. The catch is — or was, we should say — that Western Canada wasn’t producing nearly enough condensate and other diluent to keep pace with fast-rising demand, so a few years ago, two pipelines from Alberta to the U.S. Midwest were repurposed to allow diluent to be piped north. More recently, though, Western Canadian production of diluent has been soaring and new pipeline capacity has been built within Alberta to deliver it to the oil sands. That has the potential to reduce the need for imports from the U.S. and may soon lead to at least one of the import pipes being repurposed yet again. Today, we continue our series on diluent with a review of the pipeline systems that collect locally produced light hydrocarbons that are eventually employed in the oil sands.
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Never Let Me Down - Pembina Inks Ethane Supply Deal with Dow's Alberta Ethane Cracker Expansion
With an announcement in late 2023 by Dow Chemical that it would be undertaking an enormous expansion of its ethylene production site in Fort Saskatchewan, AB, it was immediately clear that Alberta’s ethane supplies would need to increase by a significant 110 Mb/d. As we’ll discuss in today’s RBN blog, a deal was signed in February between Dow and Pembina Pipeline Corp. that calls for the midstreamer to provide up to 50 Mb/d of additional ethane supplies and, according to executives at Pembina’s investor day earlier this month, will require the company to invest between C$300 million (US$220 million) and C$500 million (US$367 million) to build out its existing NGL/ethane infrastructure.
