By Shaun Penner

Oil and Gas

CAPP seeing positivity in natural gas as global demand increases

Jun 10, 2019 | 2:16 PM

Though the oil industry continues to struggle in Canada, the Canadian Association of Petroleum Producers sees natural gas as a positive moving into the future.

This coming from Community Engagement Advisor with CAPP Kelly McTaggart, who presented to County of Grande Prairie Council this morning. In her presentation, she stated the global demand for Natural Gas, mostly natural gas produced electricity, is expected to increase exponentially by 2040.

That is something the Peace Region is well positioned for, with many projects already in operation along the Montney and Duvernay reserves.

“For Grande Prairie specifically, you know, the County and the City and the surrounding area has done a very good job at looking at diversification options within the industry; condensate projects being one of them,” said McTaggart.

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Add in the Coastal Gaslink project in the B.C. Peace, McTaggart sees a lot of opportunity in this area to capitalize on demand in Eastern Asia, China and India.

“LNG is a great start. It is a completely new industry for Canada in terms of exporting to Asia, so that’s very exciting and very positive for Canada’s energy story as a whole,” said McTaggart.

CAPP projects that by 2040, China and India will require an additional 54 billion cubic feet/day of natural gas, compared to today’s consumption.

They further add that those same two countries, which house approximately 36% of the world’s population, will require 10 million more barrels of oil per day by that same time. With Canadian pipeline capacity full and with current struggles to get that oil to market due to a lack of pipelines and major projects such as the Trans Mountain expansion, Keystone XL and Enbridge Line 3 all being held up in court, the time is now to get that infrastructure completed.

“The really important part of this story is that Trans Mountain represents a pipeline that would move oil, and really be the first and primary shipment to Asia from an oil perspective,” said McTaggart. “So that’s where we are looking right now for the oil side of the industry, is we really need to get that pipeline built.”

Currently, CAPP is projecting another year of decline in the energy sector when it comes to well drilling and capital investment. Investment is expected to see an eight percent reduction from 2018 levels (both in the oilsands and conventional market), as well as the number of wells being drilled, which is expected to see a 10% reduction from the previous year.

At the closing bell today, Canadian Crude Index was trading at $36.08 a barrel, while Western Canadian Select was trading at $39.89 a barrel.