Winter’s End Hits Canadian Gas Hard
A relatively healthy winter heating season for Canadian gas producers that saw stronger prices in Alberta crashed to an abrupt end in April, according to data released May 17 by Canada’s regulatory National Energy Board (NEB).
The benchmark Nova Inventory Transfer (NIT) trading price averaged just C$0.92 (US$0.68)/Gj in April, the NEB report says, down from C$2.48/Gj in March 2019 and well below the year-ago average, in April 2018, of C$1.42/Gj.
Benchmark prices at other North American trading points also weakened, the board said: Henry Hub fell to C$3.29/Gj in April from C$3.63/Gj in March; the average at the Dawn trading hub in Ontario slipped to C$3.13/Gj from C$3.70/Gj; while the average at Station 2 on Spectra Energy’s Westcoast system (which moves gas to Canada’s west coast and to export markets in the US Pacific Northwest) was just C$0.67/Gj in April, down from C$0.97/Gj in March.
Although the NEB report doesn’t provide NIT prices over the 2018-2019 winter heating season, data provided by Intercontinental Exchange shows the Alberta Market Price (a volume weighted average of transacted prices for all physically delivered natural gas) increased steadily through the heating season, from C$1.40/Gj in October 2018 to C$2.32/Gj in February 2019, slipping to C$2.20/Gj in March as temperatures in western Canada began to warm.
Weaker commodity prices were compounded by continuing weakness in export volumes, the NEB said, as net exports in February 2019 averaged just 5.06bn ft3/day, down from 6.38bn ft3/day in January. And western Canadian producers continued to lose market share in eastern Canada to US producers, as gas imports into Canada rose to 2.98bn ft3/day in February from 2.70bn ft3/day in January.