Supported by the largest increase in imported Canadian gas since1995, total natural gas imports rose for the 11th straight year in1998, according to a recent Department of Energy (DOE) report.

Overall, the DOE said net imports as a percentage of totaldomestic gas grew 14% to 3,153 Bcf. Total exports grew 3% from159.7 Bcf in 1997 to 164.4 Bcf in 1998. Canadian imports, whichamounted to 3,052 Bcf, accounted for 96.8% of the total U.S. importmarket.

The Canadian imports marked a 5% growth from 1997 amounts. Thisis the largest jump since 1995, when gas imports from Canada jumped8% from 1994 levels. U.S. exports to Canada fell 23% from 59.1 Bcfin 1997 to 45.3 Bcf in 1998, creating a net import of 3006.7 Bcf.The average price of gas imported from Canada was $2.14/ MMBtuunder long-term (over two years) contracts and $1.74/ MMBtu undershort-term contracts.

The jump in Canadian imports, however, did not translate into ajump in Canadian income. A 9% drop in international border pricesfor Canadian supplies from $2.11/ MMBtu in 1997 to $1.91/ MMBtu in1998 resulted in a drop of Canadian producer revenue. The DOEcalculated the Canadian producer revenue at $5.8 billion, a $300million decline from 1997 amounts.

Although the U.S. imported more and exported less to Canada, thereverse was the case in U.S. – Mexico gas trading. Imports fromMexico decreased from 17.2 Bcf in 1997 to 14.5 Bcf in 1998.Exports, which reached 53.1 Bcf, increased 38% over the previousyear’s level. Over half of the export volume was shipped throughthe Samalayuca Pipeline, a 45-mile, 24-inch pipeline that opened onDec. 20, 1997 and transports gas from El Paso Natural Gas’ HuecoCompressor Station to Mexican markets via the international bordernear Clint, TX. In the fourth quarter alone, this pipeline exported10.5 Bcf to Mexico.

Like the Canada situation, however, low prices inhibitedprofit-making, as the weighted average price of U.S. exports toMexico hit a three year low of $2.02/ MMBtu.

The report was published in late March. The DOE’s Office ofFossil Energy and Office of Natural Gas & Petroleum Import andExport Activities contributed to it.

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