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    Canadian heat wave impacted gas output, prices


Soaring temperatures caused production 'heat-offs' as compressors faltered.

by: Dale Lunan

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Canadian heat wave impacted gas output, prices

Soaring temperatures across much of western Canada in the last week of June forced as much as 4bn ft3/day of natural gas production off-line, the CEO of a major Canadian gas producer told NGW July 5.

As temperatures in some parts of BC and Alberta climbed above 40°C, Peyto Exploration & Development CEO Darren Gee said, gas compression equipment began to struggle.

“Most (compressors) are not designed to run in that heat, much the same as Texas natural gas wells are not designed for sub-zero temperatures,” Gee said, referencing last February’s polar vortex, which caused gas wells in Texas to “freeze-off” as temperatures plunged. “So these ‘heat-offs’ reduced natural gas supplies (for power generation) right when air conditioners were drawing max electrical load.”

The results of the extreme heat were felt across the Western Canada Sedimentary Basin (WCSB), Gee said. On June 29, the hottest day of the heat wave, mid-day flows on the Nova Gas Transmission Limited (NGTL) system, which moves about 80% of the gas produced in the WCSB, fell to about 8bn ft3/day from normal levels around 12bn ft3/day. That was more gas offline than at any point during the polar vortex.

“If most producers were like us, they shut in or turned down their compression during the day when it was hot, then sped their compressors back up at night to try to catch up,” Gee told NGW. “That pulled down the pressure on the [NGTL] system during the day, then packed it back up at night.”

With less gas going into NGTL, he added, about 2.1bn ft3 of gas was pulled from storage over the June 28-30 period. And that, in turn, pushed prices in western Canada higher: over those three days, the daily index gas price in Alberta exceeded C$4/gj – about C$0.75/gj higher than before temperatures started to climb.