Monday , February 6 2023

LNG Canadian partner Petronas reduces natural gas output due to falling prices


Western Canadian gas prices are so low that the partner in the country's first LNG export project closes the earnings wells and stops the exploration program.

Malaysia's Petronas, with a 25-percent interest in the $ 40 billion LNG Canadian project, is a North Korean investor, B.C. The production capacity of the wells is 50 to 200 million cubic feet per day. The Canadian branch executive is capable of producing 700 million cf / d.

The experience is acknowledged by a number of Western Canadian producers that natural gas is not sold at a cost that does not cover pipeline transportation costs.

Petronas Energy Canada Ltd. CEO Mark Fitzgerald, referring to oil price cuts in West Canada, said: "We talk a lot about the oil infrastructure."

"Gas is also stranded, and if we compare Canadian gas producers' prices against their peers in the US, the differences are important and we are spending a significant amount of money."

Operation of only one device

Natural gas exploration was launched in the North East B.C. From 2012 to 2016, more than 25 drilling rigs are being exploited during the summit to prove the resource potential as part of the long-term plan to build a liquefied gas export terminal.

Fitzgerald said that now it's just a device.

Petronas received support from $ 36 billion Pacific NorthWest LNG in 2017, but joined the LNG Canadian partnership led by Royal Dutch Shell in May.

The partners decided to continue their project this fall, but it is expected that natural gas will begin to be supercooled and transported by the end of 2023 or early 2024.

Ian Archer, co-director of IHS Markit, said that the western Canadian gas industry is stable from 2000 to 2008, with prices estimated at about 16 billion cf / d and about $ 10 per gigajoule, but new drilling and well drilling technologies The United States has dramatically improved the production of schist gas.

IHS Markit and Ian Archer said that pipe companies have spent billions of dollars to expand gas systems in Western Canada, but it is difficult to see that gas can get better prices. (Associated Press)

The US has started to shift western Canadian gas in markets such as cheap gas, Western Canada, East Canadian, and New York. The price of western Canada has dropped to about 13 billion cf / d by half in 2012, dropping to half.

The trend was deteriorating when new drilling technologies were used in the north-east. and north-western Alberta are required as a diluent to mix oil with raw bitumen to allow flow in this pipeline, which is required to produce light oil products like oil condensate.

Condensed wells typically contain a high level of natural gas, and more than 16 billion cubic meters of gas have the capacity of the pipeline and this year's gas prices fall to about $ 1.43 per quarter in 2014. , said Archer.

US Benchmark Henry Hub spot price is projected at $ 3.17 per GJ (forecast C $ 4.12) in 2018, according to the US Energy Information Administration.

Pipeline companies spend billions of dollars to expand their gas systems at B.C. and Alberta will improve market access, but it is difficult to see that gas will be sent to get a better price, "Archer said.

Gas marketing is more important than ever

LNG is expected to require around 2 billion cubic meters of gas per year to produce approximately 14 million tonnes of LNG annually in Canada, but most of this gas will come from the partners, as a major price increase is not expected, he said.

The best expectations of better prices, strong demand from additional LNG devices, turn coal burning power plants into gases, and increase the amount of natural gas used in steam and energy production.

Mike Rose, Director General of the Turmalin Oil Corporation, said Calgary had frozen about 1.35 billion cubic meters of gas at the end of 2017 and had been focusing its attention since the oil production growth due to the low prices.

Turmaline said that gas sales are more important than ever when gas is trying to transport more gas to any center offering better prices than Alberta or B.C.

"It's the hardest time I've been in Canada for a long time in the oil and gas industry."

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