The natural gas market in Canada is “about to turn the angle” into a new era with higher prices, according to BMO Capital Markets veteran analyst Randy Oleberger.
He and his peers see new projects for the export of liquefied natural gas that cause higher prices for Canadian producers for years to come after demand exceeds supply.
The first supply of liquefied natural gas (LNG) manufactured at the LNG Canada terminal near Kitimat, BC Left Port for Storage and Regasification Terminal in Inches, South Korea last week. Previously, the only export market in Canada was the United States through the pipeline.
The joint venture Shell PLC (Shel) provides long-awaited access to higher Canadian gas prices in Asia.
“Long -suffering Canadian gas companies (and investors) are ready to take advantage of several structural changes, including: launching LNG Canada, reducing production in several major US pools and increasing demand by AI and data centers,” Oleberger wrote in a recent note to customers.
“[The] Canadian gas market [is] On the way to turn the corner. “
The first phase of liquefied natural gas Canada will export from two processors with a total capacity of 14 million tonnes per year (MTPA). The second phase that is considered would double that. Meanwhile, two additional projects in Canada have reached their final investment solution: Cedar LNG and Woodfibre LNG.
A new analysis of Deloitte Canada, published on Monday, evaluates Canada, will not fill the demand created by current export projects for liquefied natural gas for four to seven years.
“This will probably mean a strengthening of the AECo indicator, which will allow Canadian manufacturers to achieve more favorable value for their gas,” the reports of Deloitte Canada, led by the energy, resources and industrial Andrew Botteril, said.
“During this period, in which production increases to satisfy the demand, the prices of natural gas must monitor the narrowing of the difference against Henry Hub, which lasts for several years after exports increased by liquefied natural gas Canada.”
Canada is the fifth largest natural gas producer in the world and the fourth largest global exporter.
Manufacturers have been confronted with difficult times in 2024 as prices have fallen to their lowest levels for more than 40 years. According to statistics, Canada, higher production and storage, combined with the weaker than the expected winter demand, has led to a decline in prices in the second half of the year.
Deloitte Canada sees AECo $ 2.20 per million BTU prices in 2025, compared to $ 1.39 in 2024. In 2026, the company says AECo prices are expected to be an average of $ 3.45 before paying at $ 3.50 to $ 2032.