Surplus

The new year in Canadian natural gas exports is off to a shaky start, but strong domestic demand for underground oilsands production and reduced drilling are burning off surplus supplies.

The new year in Canadian natural gas exports is off to a shaky start, but strong domestic demand for underground oilsands production and reduced drilling are burning off surplus supplies.

The United States has become a “surplus natural gas producing country essentially forever” because of shale gas, Credit Suisse analyst Edward Morse said recently.

Reflecting conditions of depressed demand and surplus supplies in the Pacific Northwest, Williams’ Northwest Pipeline Co. has decided to halt plans for a 172-mile extension of 36- and 30-inch diameter pipelines that was set to provide another 500 MMcf/d of capacity into the region’s Interstate 5 corridor.

Reflecting conditions of depressed demand and surplus supplies in the Pacific Northwest, Williams’ Northwest Pipeline Co. has decided to halt plans for a 172-mile extension of 36- and 30-inch diameter pipelines that was set to provide another 500 MMcf/d of capacity into the region’s Interstate 5 corridor.

Weather surprises aside, North America’s growing natural gas surplus, low oil prices and an expected resurgence in liquefied natural gas (LNG) imports may keep Henry Hub prices below $7/MMBtu for “much or all” of 2009 and 2010, an energy analyst said in a review.

After completing 27 mergers and acquisitions in 15 years, Devon Energy Corp. always thought it had a surplus of people, but those coming in the door masked the exodus of early retirees and others. Now, with 10% of Devon’s workforce eligible for early retirement and nearly 60% eligible to leave within 10 years, the producer is joining its peers to step up recruiting and retention efforts.

After completing 27 mergers and acquisitions in 15 years, Devon Energy Corp. always had a surplus of people, but the “new” people masked a problem that began to surface about two years ago, the company’s manager of project support said Wednesday. Ten percent of Devon’s workforce now is eligible for early retirement and nearly 60% will be eligible to leave within 10 years, and the producer now is stepping up its recruitment and retention program.

Traders watched in awe Thursday morning as the sizeable year-over-year storage surplus, which stood at 400+ Bcf just four short weeks ago, switched to a 26 Bcf deficit following the Energy Information Administration’s (EIA) 224 Bcf withdrawal report for the week ended Feb. 2. Although trading a fairly tight range, March natural gas futures zig-zagged on Thursday, putting in a low of $7.710 and a high of $7.935 before settling at $7.871, up 16.2 cents from Wednesday.