ST Canadian Natural Gas Deliverability

[HenryTo]

The natural gas production outlook from Canada in the next couple of years. This was originally published in November 2004 but it is still very much updated. Very important considering that Canadian natural gas now accounts for 25% of total gas consumption in North America today.

http://www.neb.gc.ca/energy/EnergyReports/EMAGasSTDeliverabilityCanada2004_2006_e.pdf

I will quote from the overview:

For much of this decade, North American natural gas markets have experienced an extremely close balance between supply and demand. Since 2001, supply growth has stalled and demand has had to be reallocated to accommodate market growth. These tight market conditions have been contributing to high and volatile natural gas pricing. Over the last year, a dramatic increase in oil prices has exacerbated the upward movement in gas prices by reducing fuel switching opportunities. In such a tightly balanced market, the critical role of Canadian gas supply takes on even greater importance.

With production and decline rates fairly stable in conventional areas of the WCSB, a similar amount of deliverability will need to be replaced each year through new well connections. However, the average initial productivity of new well connections in conventional gas areas of the WCSB continues to trend downward. To offset the slippage in productivity, an increasing number of new gas well connections are needed each year to maintain conventional WCSB deliverability.