A wary Alberta government has lowered its natural gas price expectations as its industry prepares to use a national pipeline toll cut to recapture Ontario, Quebec and northeastern United States sales in competition against American shale production.

In a mid-year budget update Canada’s chief gas-supplier jurisdiction cut its 2017 forecast for the Alberta Reference Price (ARP) to C$2.60 per gigajoule (US$2.18/MMBtu) from winter hopes for C$2.90/GJ (US$2.44/MMBtu).

The provincial treasury forecast projects 2017 experience to date with the ARP. The government benchmark, used for royalty collection purposes, drills deeper into industry performance than commodity spot transactions by compiling monthly weighted average prices fetched by actual production for all Canadian domestic and export gas markets.

Alberta producers are awaiting National Energy Board approval for TransCanada Corp. to sharpen their competitive edge by approving, as of Nov. 1, a 46% toll cut on its cross-country gas Mainline to C$0.77/GJ (US$0.65/MMBtu).

The discount applies to shipments of nearly 1.5 Bcf/d by 23 producers that signed 10-year delivery contracts after persuading TransCanada to help them fight to recover eastern sales losses that have left western legs in the Mainline half-empty.

The Alberta government’s wary outlook for prices across the hotly competitive North American natural gas market echoes its sobered expectations for oil. The provincial treasury cut its 2017 oil forecast by 11% to US$49 per barrel from winter visions of US$55.