Two of the country’s largest natural gas producers announced new or accelerated growth plans this week: the best days are the head of the sector despite the prices of Western Canadian gas that are currently “well below” the cost of supplying the fuel to the markets.
Tourmaline Oil Corp., the largest natural gas producer in Canada, announced plans this week to increase the production of 30 percent by 2031, making way to the predictions of TC Energy Corp. and others that the demand for natural gas in North America will accelerate in the next decade. Even so, natural gas prices in western Canada are currently around a minimum of 40 years.
“We will be a materially larger and more profitable company about the moment we hope that the continent will be seen for the resources,” said Tourmaline executive president Mike Rose on Wednesday, describing the plans for an initial expenditure of $ 350 million in the region of Bituminous shale gas of Montney of British Columbia.
“We can reduce speed if prices do not cooperate, or we can accelerate if prices are ahead of what we expect,” Rose said, adding, “that does not seem to happen very often.”
The company also announced a new eight -year supply agreement with the German Energy Firm Uniper SE on Wednesday that will provide 80,000 million British thermal units per day (MMBTU/D) of natural gas to export terminals on the coast of the Gulf of the United States from November 2028.
Turmaline said it aims to increase production to 850,000 barrels of equivalent oil per day (BOE/D) by 2031, compared to approximately 629,265 BOE/D in the first half of this year, with new gas plants and transport infrastructure.
Gas rival producer Arc Resources Ltd. said he is increasing his capital expend
Despite its optimistic perspective for growth, the company said it has chosen to close its entire dry gas production at the moment, ascending to approximately 60,000 BOE/D, until prices recover.
Lower rock prices
Currently, prices are “well below” the cost of extracting, processing and transporting gas to the market, said the financial director of ARC, Kris Bibby, in a profit call on Friday.
“We simply refuse to waste the resource when we do not have to wait so long to make a better performance rate of those assets,” said Bibby, noting that the company expects prices in western Canada to improve later this year and until 2026 as the GNL Canada continues to increase to the total capacity in its shipping terminal on the BC coast.
A perennial mismatch of supply and food capacity to carry pipes of the sedimentary basin of the west of Canada (WCSB) is worse than usual, says the industry. The maintenance of different portions of the NGTL pipe network criticism of TC Energy This summer has congested gas flows, creating an excess supply in the region that has cross prices.
The cash price for Alberta’s reference point, known as AECO, averaged only $ 0.76 per gigajoule (GJ) or $ 0.55 per million British thermal units (MMBTU) in July, according to RBN Energy data. That is the fourth lowest average monthly price since 1985, when Ottawa disregulated natural gas prices for the first time.
mpotkins@postmedia.com
