Another good piece from RBN via Bruce's Million Dollar Blog....This regards Alberta Can & its huge stranded gas reserves, some plans which might be put in motion to alleviate it are featured.
Borders should be like nature.........The Time shapes of capital sole arbiter.
RBN Energy: update on the glut of Alberta, Canada, natural gas.
Alberta’s gas reserves are enormous: an estimated 33 Tcf of conventional gas, up to 500 Tcf of coal-bed methane gas, and up to 1,291 Tcf of shale gas, though it remains to be seen how much of that unconventional gas can be economically produced. Alberta accounts for more than 70% of Canada’s gas production, and more than 90% of Alberta’s gas comes from vertical wells. That is expected to change as the major shale plays in the province shift from exploration to production, but decisions on investing billions of dollars in unconventional gas production, new pipelines and the like will hinge on finding markets for that gas. ... All seemed to be going reasonably well for Alberta gas producers until the shale-gas revolution. Over the past five years, however, more and more gas buyers in the traditional markets for Alberta gas have switched to U.S. shale gas supplies--from the Marcellus and Utica plays in particular--and several new pipelines now under development will give U.S. producers enhanced access to those consumers.... the changing dynamics of the North American gas market—and changes in TransCanada gas-transportation pricing—have made Alberta gas the odd man out. Another way to put it is, even at the relatively low spot prices for Alberta gas, it makes more sense to store gas in-province than it does to flow it through the Mainline. Of course, something would have to give if, as seems possible for the first time in decades, Alberta’s gas-storage facilities—estimated to have the capacity to store as much as 400 Bcf--are filled to the brim in the next few weeks. That storage max-out probably won’t happen, but even the thought of it has gas producers tracking the market very closely. If there is literally no more in-province storage capacity left, Alberta gas prices would need to plummet to move gas to the east and/or producers hedged the least and exposed the most to fluctuating spot prices would need to consider “shutting in”—that is, suspending gas production at some wells to ratchet Alberta’s gas grid back into balance. So, will we be seeing stories of natural gas storage maxing out in Alberta by the end of the summer? Stay tuned. |
