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Canada’s U.S. Natural Gas Import Volumes Up 25%, Prices Rise 33% in First Nine Months of 2017

Canadian natural gas imports from the United States increased 25% in volume and 33% in price during the first three quarters of 2017, according to the U.S. Department of Energy’s (DOE) latest trade scorecard.

Northbound cross-border pipeline deliveries hit 693 Bcf from January through September, up from 556 Bcf in the comparable 2016 period, said the DOE’s regulation and international engagement office.

Prices fetched by U.S. gas flowing into Canada jumped to an average US$3.09/MMBtu at the international boundary for the first nine months of 2017 from $2.32/MMBtu for the same period the year before.

Canadian pipeline deliveries into the United States remained the biggest volume block in the North American gas trade but recorded almost no growth.

Canadian exports, at 2.302 Tcf, rose by only 1% in first three-quarters of 2017 from 2.265 Tcf in the same period of 2016.

Setbacks in first nine months of last year included traffic interruptions for construction and maintenance that cut flows by 2 Bcf/d on TransCanada Corp.’s Alberta and British Columbia (BC) supply collection network, Nova Gas Transmission Ltd. (NGTL).

Prices fetched by Canadian pipeline exports made up for their lack of volume gain by recovering to a 2017 first nine-months average of $2.53/MMBtu, up 30% from the lean times low of$1.95/MMBtu suffered a year earlier.

Canadian exporters consistently underachieve price averages received by their American counterparts because their deliveries go to widely varying markets across the continent. U.S. exports flow to Canada’s highest-value destinations in Ontario and Quebec.

The Canada-U.S. gas trade started to change in the last three months of 2017, although the new pattern remained an evolving unknown.

NGTL’s traffic interruptions ended, the construction increased the network’s capacity, and TransCanada inaugurated a deep toll discount on its long-distance Mainline from Alberta and BC to Ontario, Quebec and U.S. border crossings.

U.S. southbound exports to Mexico increased half as fast as the northbound flows into Canada, rising by 12% to 1.139 Tcf in first three quarters of 2017 from 1.015 Tcf in the same 2016 period. Mexican border prices rose by 32% to $2.24/MMBtu.

The fastest-growing item in international trade in North American production continued to be U.S. exports of liquefied natural gas (LNG). Overseas tanker shipments increased by 337% to 464 Bcf in first nine months of 2017 from 106 Bcf a year earlier. LNG export prices were flat at an average $4.65/MMBtu.

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