Things are looking up for natural gas
Increased demand from oil sands operations and Alberta power plants, infrastructure improvements and stronger prices all bode well for the sector in 2021
By ATB Economics 11 February 2021 1 min read
Alberta’s natural gas sector is expected to have a good year.
Increased demand from oil sands operations and Alberta power plants, infrastructure improvements and stronger prices all bode well for the sector in 2021.
Greater liquid natural gas (LNG) takeaway capacity in the United States, which added two billion cubic feet per day (Bcf/d) of additional export capacity last year, and rebounding global demand are helping to drain an oversupplied North American market.
Unlike the Keystone XL oil pipeline project that was kiboshed by President Biden in January, TC Energy Corporation received approval from the Government of Canada for its 2021 NGTL System Expansion Project in October 2020.
The project is a key component of a $9.9 billion infrastructure program that will add 3.5 Bcf/d of incremental delivery capacity between 2020 and 2024.
On the price front, the latest forecast from GLJ Petroleum Consultants shows the price of AECO-C natural gas averaging 2.15 (USD) this year. This represents an increase of 28.0 per cent over 2020 and a jump of 66.3 per cent compared to 2019.
The improved conditions are expected to increase drilling and capital investment which will spur employment growth in the sector.
Answer to the previous trivia question: Completed in 2019, Edmonton’s Stantec Tower is the tallest building in Canada outside Toronto. The estimated cost of the project is $500 million.
Today’s trivia question: Which country has the largest natural gas reserves in the world?