A picture, or in this case a chart, can say a thousand words. Last week our ARC SnapChart highlighted the growing discount for AECO price over the past six months (see “AECO Natural Gas: Fifty Percent Discounts Don’t Last Forever”). Our commentary argued that price arbitrages always get ironed out eventually, as evidenced by both economic theory and history.
This week’s SnapChart plots the new outlets on the horizon for Western Canadian natural gas. There is already a line-of-sight on 2.4 Bcf/d of new demand and exports, from pipeline expansions that are in the works, growing oil sands demand, and increasing consumption from Alberta’s power generators that are switching from coal feedstock to lower-carbon natural gas.
Beyond these projects, the SnapChart also illustrates the potential for greater market access, including expanding flows to Eastern Canada and the US, along with liquefying natural gas on Canada’s west coast for delivery to Asia.
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