Canadian Exports Rise for 13th Year
With an extra boost from the industry's newest branch offshore
of Nova Scotia, Canadian natural gas exporters chalked up their
13th consecutive annual record during the contract year that ended
last Oct. 31.
Sharply increased prices on rising volumes propelled revenues
from sales to the United States to C$16.6 billion (US$11.3 billion)
--- up 60% from C$10.4 billion (US$6.9 billion) in the 1998-99
contract term. Average prices at the border shot up 52% to US$3.21
per MMBtu in '99-00 from $2.12 in for the previous year. Volumes
rose 6.6% to 3.5 Tcf.
Records kept by the National Energy Board show the
fastest-growing U.S. market in '99-00 for Canadian gas exports was
the northeastern states, the destination for production from the
Sable Offshore Energy Project via the year-old Maritimes &
Northeast Pipeline. U.S.-Northeast sales volumes rose 22% to 979
Bcf, while average prices were the highest in the trade at US$3.62
per MMBtu --- up 47% from 2.47 in the '98-99 contract year.
The second highest but fastest rising prices were in the Middle
Western states, where Canadian gas fetched an average US$3.14
during '99-00, up 57% from $2 in the preceding contract year.
Volumes delivered to the region rose 3.5% to 1.3 Tcf. In
California, formerly the top destination for Canadian gas exports,
the average price rose 56% last year to US$3.02. Sales volumes in
the golden state edged ahead 3.3% to 685 Bcf/d. In the U.S.
Pacific Northwest, Canadian gas sales slipped by 3% to 504 Bcf/d
but the average price rose 38% to US$2.90. In the U.S. Rocky
Mountain region, a 38% increase in price to a '99-00 average
US$2.84 offset a 21% drop in volumes to 29 Bcf/d.
The long string of 13 annual export records has increased U.S.
sales volumes of Canadian gas five-fold since the onset of energy
free trade and deregulation in the mid-1980s The Canadian share of
the U.S. market has about tripled into the range of 14-15%.
Revenues have multipled nine-fold since both sales volumes and
prices bottomed out in the mid-1980s.
The NEB's gas exports report came on the heels of a forecast by
the U.S. Energy Information Administration that the growth will
continue for at least two more years. The EIA projects U.S. imports
will grow to 4 Tcf this year then rise again in 2002 to 4.19 Tcf.
Provided the industry can find the gas, western Canada is expected
to lead the growth this year with added deliveries to the Chicago
region via newly-completed Alliance Pipeline. While prices are
expected to retreat from this winter's highs, EIA projects strong
U.S. market performances averaging US$5.22 per MMBtu this year and
$4.57 in 2002. Going forward a landmark report on the Canada's
entire gas endowment is scheduled for release before summer by the
Canadian Gas Potential Committee.
Gordon Jaremko, Calgary
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