Five-year outlook points to production declines as US shale gas ramps up
March 20, 2017
by CP STAFF
CALGARY — The Conference Board of Canada says natural gas producers are in for more losses as they face flat North American demand and increased US competition.
In its five-year outlook, the Conference Board says Canadian production will decline as the US becomes more self-sufficient thanks to an abundance of shale gas projects.
Years of supply increases to the south, coupled with a warm winter, led to the lowest prices since the late 1990s last year and pre-tax losses of $7.6 billion for Canada’s gas producers.
The Conference Board says rising prices, boosted in part by the growth of US natural gas exports through pipelines and liquefied natural gas, could trim the losses of Canadian producers to an estimated $2.8 billion this year before returning to profits in 2019.
Canadian demand for natural gas is expected to increase in the coming years thanks to the oil sands and power plants, but a shift in the US towards renewables and back to cheaper coal means overall North American demand is expected to be flat.
The Conference Board says the rise of US LNG exports could mean increased demand for Canadian gas in the future, while the report assumed no major Canadian LNG projects would be in service by 2021.News from © Canadian Press Enterprises Inc. 2016