Supply will be tight, but Alberta will be able to meet its natural gas export commitments this winter, says a major Canadian gas marketer.
Craig Frew, president of Western Gas Marketing Ltd., Calgary, said he is confident supply shortages experienced in the 1992-93 heating season due to deliverability problems will not be repeated.
The Western Gas executive spoke at an international oil and gas markets conference sponsored by Canadian Energy Research Institute (CERI), Calgary.
Frew said there has been a dramatic increase in Canadian gas drilling, and pipeline capacity to export markets has been expanded. An expanded pipeline system between Alberta and California is scheduled to go on stream Nov. 1 at the start of the winter heating season.
Frew said the western Canadian sedimentary basin can supply 5.7 tcf/year of gas well into the next century. Current sales commitments from the basin total 4.7 tcf/year.
Mark Pocino, vice-president of gas supply for Southern California Gas Co., Los Angeles, said shippers can expect bargains in pipeline tolls because of capacity expansions. Markets have changed, but the critical issue in the future is assuring customers of "reliability of supply."
Edwin Anderson, general manager of Brooklyn Union Gas Co., Brooklyn, N.Y., cited cogeneration as one of the most promising market developments in the U.S. Northeast. Northeast gas demand is expected to rise to 26.2 tcf in 2010 from 20.3 tcf in 1992.
MEXICO'S GAS DEMAND
Pedro Gomez, an executive of Mexico's Pemex told the CERI conference Mexico's demand for gas imports is expected to decline. Future requirements will be met by domemstic supply.
Gomez said Mexican gas consumption has been steadily declining in recent years, and higher gas prices have made crude oil more competitive.
The Pemex official said when Mexican gas demand grows, much of the needed supply is expected to come from reserves currently being developed by Pemex in the northern Mexican states. Pemex is placing increased emphasis on gas development projects.
Growth in gas demand is expected for environmental reasons and by extension of gas service to cities such as Guadalajara.
Peter Linder, CERI vice-president of gas, said he does not expect Canadian producers to face competition from Mexico for at least 7-10 years.
TURBULENT RUSSIAN SCENE
Charles Shultz, president of Gulf Canada Ltd., Calgary, told the conference political unrest has not hindered oil production or exports in Russia, but it is likely to slow the flow of foreign investment. He said the farther away from Moscow a development lies, the less is the effect of political turmoil.
Shultz made his remarks prior to an insurrection by Communist hardliners in Moscow that President Boris Yeltsin crushed last week with the Russian army.
Gulf is a 25% partner in KomiArcticOil, a joint venture oil development program in the Komi republic.
Shultz said there can be no quick fix in the production decline in Russian oil and gas fields, which fell 40% from 1988 to 1993, without foreign investment.
He said recognition of contract sanctity, stable government and realistic tax regimes are essential for Russia to attract foreign capital. Russians must also learn the distinction between profit and revenue.
The Gulf executive said western technology has been successful in increasing production for the KomiArcticOil joint venture. Average well production has increased to more than 900 b/d from 300 b/d. Field production has increased to 15,000 b/d from 5,000 b/d.
Shultz said only 2,300 of 32,000 inactive wells in Russia have been rehabilitated to date. He said rehabilitation is not a quick fix for production because no one knows the capability of the wells or what it would cost to return them to production.
Copyright 1993 Oil & Gas Journal. All Rights Reserved.
