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Natural gas

Canadian Natural Gas Exports to Face Capacity Constraints

Strategic Insights

— 2 min read

Canadian gas exports are expected to continue their rapid growth, hitting at least 2.8 trillion cubic feet (Tcf) per year by 2000, driven by a growing U.S. appetite for competitively priced Canadian natural gas. The increase in Canadian exports will be driven by a steady growth in U.S. demand to about 22.6 Tcf per year by 2000 from about 21 Tcf per year this year. However, a lack of pipeline capacity may start to put a squeeze on Canadian exports of natural gas to the United States before the end of the decade.

Key Takeaways:

  • Canadian gas exports are expected to hit at least 2.8 Tcf per year by 2000, marking their seventh-consecutive record.
  • The growth in Canadian exports is driven by a growing U.S. appetite for competitively priced Canadian natural gas.
  • U.S. demand is expected to grow to about 22.6 Tcf per year by 2000 from about 21 Tcf per year this year.
  • Growth in electrical cogeneration power will be the driving force behind increases in U.S. gas consumption, with over half of the new nonutility generation to be fueled by gas.
  • By 2000, about 3.7 Tcf per year of gas will be consumed by power plants, compared with about 8.8 Tcf per year by industries.
  • About 131 Tcf of undiscovered gas reserves remain in western Canada near existing conventional fields.
  • There are only two major pipeline expansions on the books: the Altamont-Wild Horse pipeline and the Northern Border pipeline expansion.
  • The Altamont project would move about 737 million cubic feet per day (MMcfd) of Canadian gas from the British Columbia border to Opal, Wyo., and is expected to be ready by November 1996.
  • Enron Corp. is planning a smaller 212.5 MMcfd expansion of its Northern Border pipeline to get more Canadian gas into the Chicago area, planned to come on line by November 1997.

Statistics:

  • U.S. gas demand is expected to grow to about 22.6 Tcf per year by 2000 from about 21 Tcf per year this year.
  • Canadian gas exports are expected to hit at least 2.8 Tcf per year by 2000.
  • U.S. natural gas consumption by sector in 2000:

+ Power plants: about 3.7 Tcf per year.

+ Industries: about 8.8 Tcf per year.

+ Commercial buyers: about 3.1 Tcf per year.

+ Residential consumers: about 5.1 Tcf per year.

  • Undiscovered gas reserves in Canada: about 438 Tcf.
  • Undiscovered gas reserves in western Canada: about 131 Tcf.
  • Altamont-Wild Horse pipeline capacity: about 737 MMcfd.
  • Northern Border pipeline expansion: about 212.5 MMcfd.

Sources:

  • Canadian Department of Natural Resources
  • Evaluation of the Canadian gas industry
  • Enron Corp.
  • Altamont-Wild Horse pipeline project
  • Northern Border pipeline project

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