Marcos - I've been reading - re: the shortage of gas in Alberta - that few juniors are able to capitalise on the situation because they 'don't have the cash' GWX seems to be in a strong position in this environment - having very strong cash flow and a strong balance sheet. I'm copying the article you place on the BEA string:
To: Kerm Yerman (12706 )
From: Kerm Yerman Thursday, Oct 8 1998 7:03AM ET
Reply # of 12765
IN THE NEWS / Alberta Faces Gas Shortage
he Financial Post
Alberta natural gas producers face a shortage of 900 million cubic feet a day this winter and say they will be forced to pull unusually high levels of gas out of storage to meet demand.
That will likely send natural gas prices soaring next summer, said one analyst.
TransCanada PipeLines Ltd. said yesterday it projects demand will reach 13.8 billion cubic feet a day from November through March, with only 12.9 bcf/d available.
"There's no question we have a supply issue. We think it's manageable," said spokesman Gary Davis.
The added drain on storage indicates a shift in the industry's ability to match supply with demand. Storage has traditionally been used as a means to hold cheaper natural gas amassed during the summer.
"It's no longer a pricing option, it's a reliance issue," added Davis.
Last winter the pipeline companies delivered 13.1 bcf/d.
If the winter is particularly cold, supply could be strained further.
Ed Peplinski, a Calgary commodities analyst with Arc Financial Corp., said using more stored gas than normal could push next summer's prices higher than winter prices because producers will be scrambling to fill storage for November 1999.
He expects Alberta prices to rise to $2.35 a thousand cubic feet in 1999, averaging $2.50 in the first quarter.
He said forecasting demand is "pretty fluid" because of weather variables, but with drilling activity down he is expecting a shortfall through 1999 of up to 900 million cubic feet a day. With the expansion of TCPL and Northern Border project pipelines this fall, that will push the utilization rate of pipelines down to 92% from 95%.
"That may not sound like a lot, but it's actually a dramatic change."
With the low levels of drilling activity, the industry can't rely as much on field production, Peplinski said.
Canadian producers maintain about 500 billion cubic feet in storage. Alberta, with capacity for 268 billion cubic feet, already had 245 billion cubic feet in storage by the end of September, leaving little room for additional stockpiling. |
