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Ziff: Can conventional gas stay competitive in Canada?

06/21/2010
Low prices for natural gas and high costs create a difficult question for the conventional gas-producing industry in Canada, says a report by Ziff Energy Group, Calgary: "Can it be competitive, even with royalty relief?"While oil prices have doubled since early last year, gas prices remain low, the report notes. The ratio of the oil dollar-price per barrel to gas price per thousand cubic feet has historically been 8:1-10:1. With gas selling at $4.20/MMBTU (US) at Henry Hub and oil at $75/bbl, the ratio is 18:1.While gas sells at that "huge discount" to oil, Ziff says, costs of Canadian gas producers remain high. The firm estimates the full-cycle cost of natural gas&mda...
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