Canada's gas deliverability to decline, NEB says

Canadian conventional natural gas deliverability is forecast to decline, Canada's National Energy Board said in a recent report.

By OGJ editors
HOUSTON, Oct. 11 -- Canadian conventional natural gas deliverability is forecast to decline, Canada's National Energy Board (NEB) said in a recent report.

Canada's average gas deliverability is forecast to decrease to 14.5-15.8 bcfd in 2009 from 17.1 bcfd in 2006.

"The drilling pace that sustained Canadian natural gas deliverability is gone for the moment," said NEB Chairman Gaetan Caron.

Most Canadian gas resources are in the Western Canada Sedimentary Basin. Production from WCSB has decreased gradually as the basin matures. WCSB drilling slowed during 2006 because of continued high project costs. Meanwhile, oil sands development projects compete with conventional gas projects for investment dollars.

With less drilling, gas production is starting to decrease. The flow of gas from the maturing WCSB alone is expected to drop to an average of 13.7 bcfd in 2009 from 16.2 bcfd for 2006, NEB said.

Drillers are concentrating on the WCSB's deeper western side, which requires complex, expensive drilling with a potential for large returns.

"We see cause for optimism as deeper drilling and improved techniques help producers deliver tighter gas from deeper wells," Caron said. "In the longer term, Canadians should rest assured that their natural gas needs will be met as other sources, such as unconventional gas, liquefied natural gas, or gas from frontier areas, enter Canada's energy market."

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