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Canadian NatGas Exports Lag U.S. Counterparts in 1H2017

Canadian natural gas merchants lost their decades-old stature as North America's champion exporters last spring, according to the latest continental market scorecard compiled by the U.S. Department of Energy (DOE).

From April through June, U.S. dealers stepped into the top spot with cross-border sales of 754.4 Bcf, a lead of 3.6 Bcf over the Canadian 750.8 Bcf that earned the United States status as a net gas exporter.

For the first half of 2017 (1H2017), including the January-March heating season of peak U.S. imports, Canadians led the gas trade by only a 0.4% margin, said the DOE’s Office of Regulation and International Engagement.

Canadian pipeline exports -- still the only kind after cancellations of liquefied natural gas (LNG) projects -- rose by 4% to 1.560 Tcf, or 8.6 Bcf/d, in 1H2017 from 1.497 Tcf, or 8.2 Bcf/d, during the same period of 2016.

The growth pace set by U.S. traders, including LNG successes, left the Canadian gain far behind. American exports jumped by 44% to 1.553 Tcf, or 8.6 Bcf/d, in 1H2017, from 1.075 Tcf, or 5.9 Bcf/d, in the same period of 2016.

U.S. foreign sales grew on all fronts. Exports to Canada in 1H2017 jumped by 28% to 497 Bcf, or 2.7 Bcf/d, to Mexico by 17% to 745 Bcf, or 4 Bcf/d, and via LNG terminals by 550% to 310 Bcf, or 1.7 Bcf/d.

Prices improved on all fronts too, with Canadians making the strongest gains out of the hard-times trough that the continental market fell into last year.

The average border price fetched by Canadian exports shot up by 52% to US$2.70/MMBtu in 1H2017 from US$1.78/MMBtu in the same 2016 period.

U.S. sales to Canada gained 48% to $3.20/MMBtu in 1H2017 from $2.17/MMBtu a year earlier. The average price for U.S. exports to Mexico also rose by 48% to $3.22/MMBtu in 1H2017 from $2.18 in the same period of 2016. The U.S. LNG export price rose by 24% to $5.04/MMBtu in 1H2017 from $4.06 in the same period of 2016.

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