From Business in Vancouver
A massive anticipated demand for new gas supplies by the liquefied natural gas industry in B.C. has yet to result in any increase gas field activity, according to National Energy Board statistics.
The Canadian gas industry is in a “holding pattern,” thanks to low North American gas prices, reports the NEB’s Energy Market Assessment for 2013-15.
“Canadian natural gas appears to be in a ‘holding pattern’ with producers undertaking minimal natural gas drilling activity since current prices do not cover the full costs of developing most natural gas prospects,” the assessment concludes.
“At current prices of around $3.00/MMBtu in Western Canada, Canadian natural gas producers are not earning sufficient returns to attract additional equity investment.”
The plateau in drilling for new gas supplies is expected to continue for the next two years.
“Due to lengthy project development timelines, significant liquefied natural gas (LNG) exports from North America are unlikely through the 2015 time horizon of this analysis,” the assessment states.
“LNG exports are therefore not expected to influence gas prices and gas drilling over the study period.”
Plans released last week suggest a single LNG plant proposed by BG Group for Prince Rupert would consume a volume of gas equal to the total amount currently produced in B.C. It is one of several LNG plants that have been proposed.
By Nelson Bennett