Canadians

Canadians are cheering on the tight “continental” natural gas market in growing numbers, as gains owed to high sales volumes and prices — driven by expanding exports to the United States — spread and multiply. The seller’s market for gas is behind Alberta government projections of a stunning budget surplus in the range of C$10-$12 billion (US$6.8-$8.2 billion) for the fiscal year that ended March 31 — or about C$4,000 (US$2,750) each for every man, woman and child living in the province. Virtually all the surplus is owed to oil and gas royalties, and the gas share of them is about 70%.

Canadians are cheering on the tight “continental” natural gas market in growing numbers as gains owed to high sales volumes and prices — driven by expanding exports to the United States — spread and multiply. The seller’s market for gas is behind Alberta government projections of a stunning budget surplus in the range of C$10-$12 billion (US$6.8-$8.2 billion) for the fiscal year that ended March 31 — or about C$4,000 (US$2,750) for every man, woman and child living in the province. Virtually all the surplus is owed to oil and gas royalties, and the gas share of them is about 70%.

Much of the North American market seemed to be joining theCanadians in still being on holiday Tuesday. In very subduedactivity scattered points (mostly in the California/PacificNorthwest region) registered upticks, but most ranged from mildlysofter to down as much as about $3.50 at the Chicago citygate.

Canadians are being told — by American investors on the prowlfor pieces of the action — that the North American natural gasmarket is headed for a spell of very tight supplies and they standto be prime beneficiaries. The projection emerged as a consensus ata Calgary conference billed as the mightiest assembly of financialmuscle ever held in the Canadian gas capital.

By virtue of a new agreement with TransCanada PipeLines Ltd.,Sears Canada could become the place where Canadians shop fornatural gas. Sears Canada and TransCanada, through its wholly ownedsubsidiary TransCanada Energy Ltd., plan to offer gas toresidential consumers in Ottawa. The program will start out as apilot, and the agreement between the companies is for six years.Sears will be the first national Canadian general retailer to offergas, the companies said.

In the wake of a well blowout and fire that burned for months inthe oil/gas saturated area between Bakersfield and the Elk Hillspetroleum reserve, a flood of small and medium-size Canadianbackers have moved into this old production region 100 miles northof Los Angeles, betting that new significant pools of natural gascan be found with deep-drilling below 15,000 feet.

The recent agreement between TransCanada PipeLines and theNorthwest Territories (NWT) (See Daily GPI, July 29) makes it plainthat both parties have their sights set on bigger game thanrelatively modest pipeline extensions into the southern part of theTerritories. After lying dormant for a decade, visions are revivingof a route extending all the way to the Mackenzie Delta and theBeaufort Sea to tap an estimated 13 Tcf or more of reserves foundin a 1970s drilling boom.

The recent agreement between TransCanada PipeLines and theNorthwest Territories (NWT) (See NGI, Aug. 2) makes it plain thatboth parties have their sights set on bigger game than relativelymodest pipeline extensions into the southern part of theTerritories. After lying dormant for a decade, visions are revivingof a route extending all the way to the Mackenzie Delta and theBeaufort Sea to tap an estimated 13 Tcf of reserves found in a1970s drilling boom.

Thanks partly to decisions in the United States, Canadians areturning up the heat under hot drilling plays along the Albertafoothills of the Rocky Mountains and in northeastern BritishColumbia. Chevron Canada’s western exploration manager, LarryStewart, revealed in a session of financial analysts howAmerican-held hot prospects of filling expanding export pipelinesare being opened up to Canadian-owned firms.