E-Library

Canadian Industrial Outlook: Gas Extraction—Winter 2019 The Conference Board of Canada, 18 pages, March 18, 2019 Report by Klaus Edenhoffer

Canadian Industrial Outlook: Gas Extraction—Winter 2019

The Conference Board of Canada, 18 pages, March 18, 2019
Report by Klaus Edenhoffer

1 2 3 4 5	4.0/5 based on 1 review

(You must be signed in and entitled to rate this report)

This report examines the short-and medium-term economic and profitability outlook for Canada’s gas extraction industry. Document Highlights Prices Remain Weak—Booming shale gas production in the U.S. is dampening the prospects for price growth. In addition, the differential between Western Canada’s benchmark price for natural gas and its U.S. counterpart has been increasing with the constraints on pipeline capacity, similar to the situation faced by oil producers. Drilling Activity Is Down—Weak gas prices are weighing on the outlook for industry profitability. In the 2018–19 winter drilling season, drilling of new gas wells was down 23 per cent year-over-year, and we expect drilling activity to decline for 2019. Investment Is Driven by Large Projects—Capital investment will hinge on the progress of two major projects—the $40-billion LNG Canada project in B.C. and the $10-billion Goldboro project in Nova Scotia, both of which will be fed with gas from Western Canada. If successful, these projects will allow Canada to ship liquefied natural gas (LNG) to new markets overseas. That would boost revenues and help to stimulate further capital investment in the industry.

This report examines the short-and medium-term economic and profitability outlook for Canada’s gas extraction industry.

Document Highlights

Prices Remain Weak—Booming shale gas production in the U.S. is dampening the prospects for price growth. In addition, the differential between Western Canada’s benchmark price for natural gas and its U.S. counterpart has been increasing with the constraints on pipeline capacity, similar to the situation faced by oil producers.

Drilling Activity Is Down—Weak gas prices are weighing on the outlook for industry profitability. In the 2018–19 winter drilling season, drilling of new gas wells was down 23 per cent year-over-year, and we expect drilling activity to decline for 2019.

Investment Is Driven by Large Projects—Capital investment will hinge on the progress of two major projects—the $40-billion LNG Canada project in B.C. and the $10-billion Goldboro project in Nova Scotia, both of which will be fed with gas from Western Canada. If successful, these projects will allow Canada to ship liquefied natural gas (LNG) to new markets overseas. That would boost revenues and help to stimulate further capital investment in the industry.

To see if you are entitled to get this research for free, take a minute and create a free e-Library account. This will let us determine if someone else at your organization has already purchased access to this material.