Document Highlights
U.S. Production Booming—Booming shale gas production in the U.S. will reduce the need for gas imports in the future and weaken demand for Canadian natural gas. With the U.S. having become a net exporter of natural gas, Canadian producers have also been facing pressure from cheap U.S. gas on their domestic market.
Prices Remain Weak—Natural gas prices have increased above their 2016 low, but the ample supply of U.S. gas is limiting the scope for further growth, which is why only modest gains are expected over the forecast horizon. Henry Hub prices will average US$3.02 per million of British thermal units (MMBtu) this year, with an average of $1.71 for the AECO-C.
Global Liquefying Capacity increasing— Last year, liquefied natural gas (LNG) terminals existed in 19 countries, with the global liquefying capacity projected to increase by 28 per cent over the next five years. A growing supply of LNG will decrease the existing differentials between gas prices in different world regions, leaving Canada a short window of time to become part of the LNG world.
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