Tuesday, November 27, 2007
Rockies producers should see rise in regional price differentials improve as Rockies Express (REX) pipeline Phase II goes into service in early 2008. Producers in the Anadarko and Permian could see a negative price impact.
DENVER--(BUSINESS WIRE)--According to natural gas pipeline flow information monitored by BENTEK Energy, U.S. natural gas exports to Canada are up 12.5% in 2007, adding an average of more than 170 MMcf of natural gas per day flowing north versus 2006. At the same time, imports into the U.S. from Canada are flat despite expectations of impending declines.
BENTEK flow data show that this average increase of 170 MMcf/d has been flowing predominantly into the Dawn Hub in Ontario via border crossing points at St. Clair and Ojibway, MI. Gas at these export points can be sourced from Great Lakes Gas Transmission or from pipelines bringing gas north from the U.S. Gulf of Mexico and the Midcontinent.
"Our analysis clearly demonstrates that this increase in U.S. exports is from supplies which originate in the U.S.," said Jack Weixel, BENTEK senior analyst. "Since Canadian gas can make its way back into Canada via the Great Lakes system, the import/export statistics can be misleading -- with increased exports in fact coming from increased Canadian supplies. In 2007, this is not the case. We know this because flow data from Canada from the Emerson border crossing point into Great Lakes shows that Canadian import volumes at this point have decreased by 1.6%. Thus, increased flows into the Dawn Hub must be the result of increased supplies from the U.S."
The BENTEK analysis also revealed that total imports to the U.S. from Canada have stayed flat this year despite production declines -- imports into the U.S. from Canada have dropped only about 0.4% year to date versus last year. This compares to a 4.1% decline in 2006 versus 2005.
Many market participants have been expecting the decline of Canadian production to lead to declining imports to the U.S., but so far this year that has not occurred. Total Canadian production for 2007 is likely to decline by only 2.3% versus 2006 levels. Average daily marketed production flowing on inter-provincial pipelines in Canada totaled 14.8 Bcf per day in 2006 compared to 14.5 Bcf per day year to date in 2007. In 2006, nearly 77% (11.4 Bcf) of production came from Alberta. This year, Alberta production is averaging just shy of 11.1 Bcf per day, accounting for nearly the entire drop in total Canadian production. In the third quarter of 2007, daily production in Alberta dipped below 11 Bcf per day, and month-on-month average Alberta field receipts on NOVA have been dropping since September 2006. Total Canadian demand is flat this year compared to 2006, with intra-provincial demand on the TransCanada NOVA system in Alberta showing a slight increase of 43 MMcf per day this year.
A new report from BENTEK, the Canadian Examiner™, provides an assessment of these developments, including Canadian natural gas production, flows, exports and imports, pricing and demand. For more information about BENTEK's Canadian Examiner™ and other market data, go to www.bentekenergy.com or call BENTEK at 888-251-1264.
About BENTEK Energy LLC
BENTEK Energy, LLC is an energy markets information company with offices in Golden, Colorado. The company brings its customers the analytical tools and competitive intelligence needed in order to make critical, bottom-line decisions in today's natural gas and power markets.
Click here for more information about BENTEK's Canadian Examiner or call BENTEK at 888-251-1264.