Winter Canadian natural gas exports leapt 15% as producers and marketers jumped to take advantage of heating season by paring down surpluses in storage, according to the latest trade data collected by the National Energy Board (NEB).

Pipeline deliveries to the United States surged to 678.4 Bcf during the first two months of the current international contract year running Nov. 1 through Oct. 31. In the comparable November-December opening period of the 2006-07 year, Canadian exports were 589.7 Bcf.

“Natural gas storage levels in Western Canada have undergone a relatively rapid normalization from record high levels at the end of October 2007,” FirstEnergy Capital Corp. observed in a heating season research note.

Volumes in Canadian storage facilities peaked at 433.7 Bcf last fall, the Alberta investment firm estimated. The backed-up supplies north of the international boundary were 77.2 Bcf, or 22% greater than the previous five-year Canadian storage average of 356.5 Bcf.

FirstEnergy described the rapid sales and storage reduction surge as “part of the rapidly changing jigsaw puzzle for North American natural gas markets — one which seems to be assembling into a much more price bullish picture than anticipated.”

The other big Canadian piece is an anticipated continuing slowdown in gas drilling. Canadian analysts currently suspect the pause could eventually lower supplies on the “continental market” with the U.S. by enough to turn the price cycle around into starting an upward trend.

North of the border a price recovery remained only a hope as heating season arrived, thanks to exchange rate trends, the NEB trade data shows.

The Canadian dollar’s steep rise by 20% or more since mid-2007 against its American counterpart denied gas exporters all the benefits of U.S. price gains, and then some.

In U.S. money, Canadian exports fetched an average US$7.34/MMBtu at the border during the first two months of the current trading year, up slightly from US$7.32/MMBtu in November-December of 2006. U.S. dollar export revenues for the opening of the 2007-08 contract year were $4.99 billion, up 15% from $4.34 billion in the first two months of 2006-07.

But in Canadian loonies border prices in the first two months of the 2007-08 trading year fell by 13.6% to C$6.75 per gigajoule (GJ) from C$7.82/GJ in the comparable period of 2006-07.

Not even the jump in sales volumes compensated for the unfavorable currency movement. Canadian-dollar export revenue shrank 0.9% to C$4.93 billion during the opening two months of 2007-08 from C$4.97 billion in the comparable period a year earlier.

Deliveries rose to all but one of the five destination regions for Canadian gas exports in the November-December opening of the 2007-08 contract year, the NEB reported.

Canadian volumes shipped to California climbed 56.5% to 89 Bcf. Deliveries to the U.S. Midwest rose 27.2% to 298.6 Bcf. Exports to the Rocky Mountains region gained 71.6% to 1 Bcf. Shipments to the U.S. Northeast improved 0.2% to 205.1 Bcf. The lone exception to the increases was the U.S. Pacific Northwest, where Canadian exports dropped 8.7% to 84.6 Bcf.

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