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DOE: Gas Imports Grow for 11th Straight Year

DOE: Gas Imports Grow for 11th Straight Year

Supported by the largest increase in imported Canadian gas since 1995, total natural gas imports rose for the 11th straight year in 1998, according to a recent Department of Energy (DOE) report.

Overall, the DOE said net imports as a percentage of total domestic gas grew 14% to 3,153 Bcf. Total exports grew 3% from 159.7 Bcf in 1997 to 164.4 Bcf in 1998. Canadian imports, which amounted to 3,052 Bcf, accounted for 96.8% of the total U.S. import market.

The Canadian imports marked a 5% growth from 1997 amounts. This is the largest jump since 1995, when gas imports from Canada jumped 8% from 1994 levels. U.S. exports to Canada fell 23% from 59.1 Bcf in 1997 to 45.3 Bcf in 1998, creating a net import of 3006.7 Bcf. The average price of gas imported from Canada was $2.14/ MMBtu under long-term (over two years) contracts and $1.74/ MMBtu under short-term contracts.

The jump in Canadian imports, however, did not translate into a jump in Canadian income. A 9% drop in international border prices for Canadian supplies from $2.11/ MMBtu in 1997 to $1.91/ MMBtu in 1998 resulted in a drop of Canadian producer revenue. The DOE calculated the Canadian producer revenue at $5.8 billion, a $300 million decline from 1997 amounts.

Although the U.S. imported more and exported less to Canada, the reverse was the case in U.S. - Mexico gas trading. Imports from Mexico decreased from 17.2 Bcf in 1997 to 14.5 Bcf in 1998. Exports, which reached 53.1 Bcf, increased 38% over the previous year's level. Over half of the export volume was shipped through the Samalayuca Pipeline, a 45-mile, 24-inch pipeline that opened on Dec. 20, 1997 and transports gas from El Paso Natural Gas' Hueco Compressor Station to Mexican markets via the international border near Clint, TX. In the fourth quarter alone, this pipeline exported 10.5 Bcf to Mexico.

Like the Canada situation, however, low prices inhibited profit-making, as the weighted average price of U.S. exports to Mexico hit a three year low of $2.02/ MMBtu.

The report was published in late March. The DOE's Office of Fossil Energy and Office of Natural Gas & Petroleum Import and Export Activities contributed to it.

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