Canada continues to expand its role in supplying natural gas to the U.S., delivering a record 2.8 tcf in 1995.
The U.S. Energy Information Administration reported net U.S. imports from Canada represented 13% of U.S. natural gas consumption and virtually all its gas imports in 1995. It said competitive prices, additional cross-border pipeline capacity, and the continued growth in demand for natural gas in the U.S. contributed to the strong imports market.
Pipeline imports from Canada enter the U.S. in four regional areas: the Pacific Northwest, the West, the Midwest, and the Northeast.
During 1994-95, imports rose in all four with the largest increase occurring in the West, where imports enter through Idaho destined for California markets.
The price of Canadian imports dropped 20% in 1995 from the 1994 level to a 20-year low of $1.48/Mcf. The sharpest decline occurred in the West, where the price went from $1.60 to $0.94/Mcf, mainly because imports under long-term contracts were replaced by lower-priced short-term imports. In 1995, for the first time, more natural gas was imported from Canada under short-term authorizations than under long-term authorizations.
Trend continued in '96
EIA said the rising trend in Canadian imports continued in 1996, but the rate of growth slowed as the price rebounded substantially.
Monthly prices during January-June 1996 averaged $1.71-2.04/Mcf.
EIA said U.S. exports to Mexico in 1995 reached 61.3 bcf, a 32% increase from 1994.
"Future prospects in the near term for exports to Mexico are uncertain. Through the first half of 1996, they declined. Expectations for a rapidly growing demand for natural gas imports from the U.S. to fuel electric generating plants in northern Mexico have not yet materialized.
"In addition, Petroleos Mexicanos (Pemex) increased gas production during the latter part of 1995 and early 1996. However, the July 1996 explosion of one of the largest gas processing plants in Mexico, which destroyed a third of Mexico's total processing capacity, has resulted in increased levels of U.S. exports to Mexico in the latter part of 1996."
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