With an extra boost from the industry’s newest branch offshoreof Nova Scotia, Canadian natural gas exporters chalked up their13th consecutive annual record during the contract year that endedlast Oct. 31.

Sharply increased prices on rising volumes propelled revenuesfrom 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 1998-99contract term. Average prices at the border shot up 52% to US$3.21per MMBtu in ’99-00 from $2.12 in for the previous year. Volumesrose 6.6% to 3.5 Tcf.

Records kept by the National Energy Board show thefastest-growing U.S. market in ’99-00 for Canadian gas exports wasthe northeastern states, the destination for production from theSable Offshore Energy Project via the year-old Maritimes &Northeast Pipeline. U.S.-Northeast sales volumes rose 22% to 979Bcf, while average prices were the highest in the trade at US$3.62per MMBtu — up 47% from 2.47 in the ’98-99 contract year.

The second highest but fastest rising prices were in the MiddleWestern states, where Canadian gas fetched an average US$3.14during ’99-00, up 57% from $2 in the preceding contract year.Volumes delivered to the region rose 3.5% to 1.3 Tcf. InCalifornia, formerly the top destination for Canadian gas exports,the average price rose 56% last year to US$3.02. Sales volumes inthe 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/dbut the average price rose 38% to US$2.90. In the U.S. RockyMountain region, a 38% increase in price to a ’99-00 averageUS$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 energyfree trade and deregulation in the mid-1980s The Canadian share ofthe U.S. market has about tripled into the range of 14-15%.Revenues have multipled nine-fold since both sales volumes andprices bottomed out in the mid-1980s.

The NEB’s gas exports report came on the heels of a forecast bythe U.S. Energy Information Administration that the growth willcontinue for at least two more years. The EIA projects U.S. importswill 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 expectedto lead the growth this year with added deliveries to the Chicagoregion via newly-completed Alliance Pipeline. While prices areexpected to retreat from this winter’s highs, EIA projects strongU.S. market performances averaging US$5.22 per MMBtu this year and$4.57 in 2002.Going forward a landmark report on the Canada’sentire gas endowment is scheduled for release before summer by theCanadian Gas Potential Committee.

Gordon Jaremko, Calgary

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