Western Canada’s natural gas production has been very robust through the current winter heating season with January 2025 setting a new record for the month at 19.2 Bcf/d (rightmost column and dashed red rectangle in chart below) based on data from RBN’s Canadian NatGas Billboard. January was 1.1 Bcf/d higher than a year ago, but 0.2 Bcf/d lower than the all-time monthly record of 19.4 Bcf/d set in December 2024. The upswing in production that has been underway since October appears to be a combination of previously shut-in or curtailed production and new wells related and unrelated to the eventual ramp up of gas supplies into LNG Canada
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Burning Down the House - Wildfires, Pipeline Maintenance Punish Western Canadian Gas Production
Western Canada’s natural gas production has been on a roll in the past couple of years, reaching a record 17.3 Bcf/d in 2022. Another year of strong growth was expected in 2023, but Mother Nature had other plans — as usual. First, a milder-than-average heating season left plenty of gas in storage, pushing natural gas prices lower across North America. Second, tinder-dry conditions in some of the best gas production areas in Alberta and British Columbia sparked what so far has been a very active wildfire season — and forced producers to curtail their gas output numerous times in May and June. From our early expectations for production growth of 1.2 to 1.4 Bcf/d this year, the impacts from wildfires and a healthy dose of pipeline maintenance has chopped our 2023 production growth outlook to just 0.4 Bcf/d. As we discuss in today’s RBN blog, this slowdown in growth is exactly the opposite of what’s needed to avoid a runup in prices. Strong production momentum will be required into 2024 and 2025 to deal with the startup of the LNG Canada export facility, ongoing Canadian gas demand growth and pipeline exports to the U.S.