Canadian natural gas exports, defying consensus forecasts of shrinkage, held firm and even increased modestly during first quarter of 2011, the U.S. Department of Energy (DOE) said.
As recorded by the DOE's natural gas regulatory activities office, Canadian pipeline deliveries into the United States Jan. 1-March 31 were 908.3 Bcf, up 1% from 901.2 Bcf in the same period of 2010.
International trading activity held steady despite stubbornly ugly prices. Canadian gas fetched an average US$4.31/MMBtu at the international border in 1Q 2011, down 20% from US$5.41/MMBtu a year earlier.
The U.S. calendar-year portrait of a stabilizing and potentially slightly improving market mirrors records kept by Canada's National Energy Board (NEB) for the contract year, which runs Nov. 1 through Oct. 31.
The records have yet to register erosion projected by most industry analysts, as well as the NEB and Alberta's Energy Resources Conservation Board. The forecasts focus on long-range trends of natural decline in Alberta conventional production from aging fields and sharply increasing domestic consumption by growing Alberta thermal oilsands extraction projects, plus official refusals to guess about the future of fledgling Canadian shale development.
The latest NEB count registers Canadian pipeline deliveries of 1.473 Tcf into the United States during the five months of Nov. 1, 2010 through March 31 this year, up 2% from 1.443 Tcf in the same period of 2009-2010.
In the NEB's records on the first five months of the current contract year border prices averaged US$4.34/MMBtu, down 18% from US$5.27/MMBtu for November-March of 2009-2010.
The modest volume gain was too small to compensate for the soft prices. Canadian gas export revenues fell by 16% in the first five months of the 2010-2011 contract year to US$6.45 billion compared to US$7.65 billion in the same period of 2009-2010.
The price and revenue trends were amplified by unfavorable exchange rates for Canadian exporters, whose setbacks were worsened by increases in the value of their dollar to par with its U.S. counterpart and at times a penny or two higher.
As measured in Canadian loonies pipeline deliveries into the U.S. fetched an average C$4.03/gigajoule (GJ) in the first five months of the current contract year, down 22% from C$5.14/GJ for the same period of 2009-2010. Gas export revenues fell by 20% to C$6.42 billion from C$8 billion.
But there was some consolation for Canadian traders that take a long view of the continental gas market. The picture is somewhat brighter than the unrelieved portrait of shrinkage on all fronts a year ago.
The gloomier picture painted by the NEB records at this time a year ago showed Canadian pipeline exports into the United States in contraction by dropping by 6% to 1.4 Tcf in November-March of 2009-2010 from 1.5 Tcf in the first five months of the previous, 2008-2009 contract term.
Two-way trading across the U.S.-Canada border continues to grow. The DOE's first-quarter 2011 records document a 29% increase in pipeline deliveries of U.S.- and Canadian-sourced gas back into Canada, up to 264 Bcf from 206 Bcf in first quarter 2010.
The average price fetched by exports from the United States north into Canada fell by 18% to US$4.55/MMBtu in January-March from US$5.54/MMBtu in the same period of 2010.
The hottest growth spot on international markets is re-exports of liquefied natural gas (LNG) landed at American import terminals to higher-priced European and Asian markets, although volumes remain small.
U.S. LNG re-exports aboard tankers shot up by 174% to 24.4 Bcf in first quarter 2011 from 8.9 Bcf in the same period of 2010.
Overall, however, LNG traffic into the gluts and soft prices of North America continues to shrink. Total tanker deliveries from overseas to U.S. terminals dropped by 20% to 110.8 Bcf in first quarter 2011 from 139.3 Bcf during the same period of 2010. Prices fetched by LNG at U.S. ports dropped by 5% to US$4.94/MMBtu from US$5.19/MMBtu.
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