Low gas prices in the West force companies to cut production
Canadian producers are getting a lower price for their natural gas than American companies because of a bottleneck in gas exports.
Two natural gas producers have decided to suspend the production of certain wells because of the volatility of the reference price in Canada, the AECO price, which was even in negative territory in August.
The Tourmaline company , one of Canada's largest producers, has reduced its daily production by 1.5% and delayed the operation of several platforms by a month.
Kelt Exploration has also temporarily closed a few wells to boost the price of natural gas.
The energy crisis in Europe has pushed up gas prices, but Canadian producers are coping to a bottleneck to export their product.
Maintenance work on TC Energy's Nova Gas Transmission Line (NGTL) system has reduced export capacity at a time when companies have increased production volume. According to the press release from Kelt Exploration, restrictions on natural gas storage and an incident with a compressor exacerbated the problem.
The gigajoule of AECO natural gas barely exceeded the dollar at the beginning of September while the same volume reached between $8 and $9 in the United States.
The two companies' announcements, however, helped to push the AECO price up above $4. AECO prices could remain volatile in September and October as maintenance activities on the NGTL system continue, Kelt said in its statement.
AECO prices carrefour AECO (Alberta Energy Company), located at the gas storage facilities in Niska, Alberta, are the reference facilities in Canada for natural gas on the NOVA Gas Transmission Ltd. network. (NGTL).
source: Canada Energy Regulator