Posts from Martin King

Monday, 07/22/2019

Once consigned to a flat or declining profile, natural gas production in Western Canada has been increasing steadily since 2012, to the extent that it has now begun to stretch the ability of the existing pipeline network to the breaking point. Most striking is that this expansion in production has been taking place in an era of declining natural gas prices and weakening basis for Western Canada’s primary natural price marker, AECO, and rising and relentless competition from U.S. gas supplies in several of Canada’s key domestic and export markets. If the pricing, pipe egress and export situation has become so dire, why are producers still drilling for and pumping out even more natural gas? Today, we address this question in the second part of our series investigating Western Canada’s natural gas supply and demand balance.

Thursday, 06/06/2019

Keyera Corp. and SemCAMS Midstream, two major midstream players in Western Canada, in mid-May announced they are proceeding with the construction of their joint-venture project — a new NGL and condensate pipeline system out of the liquids-rich Montney and Duvernay plays of Alberta. The planned Key Access Pipeline System would provide the first direct competition for the transportation of NGLs and condensate out of these producing regions, currently dominated by Pembina Pipeline Co. Any and all transportation options for the movement of condensate and other NGLs out of the Montney and surrounding plays will likely be welcomed by Western Canadian natural gas producers, who are looking to capitalize on oil-sands producers’ growing demand for homegrown sources of condensate for use as diluent in bitumen transportation. Today, we provide key details about the project and how it fits into the region’s existing condensate/NGLs market.

Tuesday, 05/21/2019

As Western Canadian natural gas production has been recovering off lows from a few years ago and pushing higher, one of the by-products of this recovery has been steadily rising production of natural gasoline, an NGL “purity product’ also known as plant condensate. Condensate production has been growing so much that Pembina Pipeline Corp. — a leading transporter of natural gasoline in the region — has been undertaking another round of expansions to its Peace Pipeline system to move more of the product to the Alberta oil sands. There, condensate is used as a diluent to allow the transportation of viscous bitumen to far-away markets via pipelines or rail. Today, we take a closer look at Pembina’s effort to expand the Peace Pipeline.

Thursday, 04/04/2019

The shutdown of natural gas production from the Sable Offshore Energy Project on Canada’s East Coast as of January 1, 2019, increased the Canadian Maritimes’ reliance on gas exports from New England this winter as consumers worked to link up with fresh supply to replace SOEP. The tightening supply in the region has prompted expansion plans from TransCanada to move more Western Canadian and Marcellus/Utica gas to New England utilizing its Mainline and other eastern systems. Today, we conclude our series examining the potential impacts of SOEP’s demise by examining new plans to bring more gas to the region. 

Sunday, 03/10/2019

After 19 years of natural gas production from the waters off the Canadian Maritime provinces, ExxonMobil, operator of the Sable Offshore Energy Project (SOEP), shut down production there, effective January 1, 2019. The closure further limits gas supply options for the already supply-constrained Maritimes and New England regions. Will the shutdown put even more stress on the already overtaxed gas pipeline system in New England? And will it spur increased flows of Western Canadian gas into northern New England and Canada’s Maritime provinces? Today, we continue our series examining the potential impacts of SOEP’s demise on New England gas markets.

Thursday, 02/21/2019

After 19 years of natural gas production from the waters off the Canadian Maritime provinces, ExxonMobil, operator of the Sable Offshore Energy Project, shut down production there effective January 1, 2019. Though the closure had been announced well in advance, the end of SOEP output has left the two natural gas-consuming provinces in the region, New Brunswick and Nova Scotia, without any indigenous gas supplies. It’s also made them fully reliant on either pipeline gas from the U.S. Northeast and Western Canada or imported volumes of LNG into the Canaport Energy terminal in New Brunswick. Will the shutdown put even more stress on the already overtaxed gas pipeline system in New England? And will it spur increased flows of Western Canadian gas into northern New England and the Maritimes? Today, in Part 1 of this blog series, we begin an examination of the potential impacts of SOEP’s demise on New England and Eastern Canadian gas markets.