IN THE NEWS / U.S. Link Linked To Higher Prices
By TIMOTHY LE RICHE, Edmonton Sun
Major natural gas pipeline projects like Alliance will bring Alberta prices in line with the rest of North America, analysts say.
That probably means higher.
"Part of the intent of the project was to provide additional pipeline capacity and bring the prices in Alberta up to the level comparable to other supply areas in North America," said Len Coad, vice-president of the Canadian Energy Research Institute.
"We've had more supply capability than pipe, which means there has been competition within Alberta between producers for that pipe and that's held Alberta prices down," said Coad.
"The market appears to be saying that argument is valid."
Alberta spot prices for natural gas were $2.61 per MMBTU yesterday, while the US price was $1.70 per MMBTU.
Rick Roberge, Pricewaterhouse-Coopers vice-president, said the Alliance project is important for Alberta's industry.
"This is all about getting our gas into the Chicago market and, eventually, the Eastern U.S.," said Roberge. "It's a key project for the industry.
"We now move to a more North American market-driven price for natural gas."
Jerome Engler, vice-president and controller of Northwestern Utilities Ltd., said the industry is anticipating approval of Alliance.
"Prices are probably already reflecting additional takeaway capacity out of the province," said Engler.
"With the additional takeaway capacity, any gas that wants to leave the province can, and therefore they can attract prices that are reflective of North America."
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