Why the prices of natural gas have not yet received a boost after LNG Canada Startup

There were high expectations ahead LNG Canada Startup The project will weaken the prices of Canadian natural gas by opening access to markets in Asia.

So far, at least, a spike in prices is not yet physically physically.

LNG Canada Cargo started exporting This year on Canada Day. Last month, the average Alberta benchmark price for natural gas was the lowest in the month of July since 1985. RBN Energy,

This project is considered to be the largest private sector investment in Canadian history and is expected to increase the country’s GDP. 0.4 percent Once it is completely up and running. LNG Canada said in a news release on 1 July that the first phase of the project, liquided natural gas or LNG from two processing units, is known as “trains”, known as “trains”.

But according to Jeremy McCre, Managing Director of Energy Research at BMO Capital Markets, “When (LNG Canada) would be completely ramp, there was a misunderstanding of expectations.”

“Producers brought over gas, which was estimated to see what we are going to see to see what we are going to see here.”

“As a result, we have an oversuppleid basin as LNG continues to ramp up the Canada.”

Prices drowned in 2024

The roots of the situation are ahead of the further date compared to this heat.

In 2024, prices for Canadian natural gas hit A 40 years lowStatistics according to Canada. The agency says that the production increased online in the BC, especially in the BC, in anticipation of the online LNG Canada project. This caused a brightness of a supply, a situation that worsened due to hot weather in North America, causing less commercial and residential demand for natural gas.

In recent months, weaker is also linked to maintenance on pipelines than the expected prices for natural gas, which leads the natural gas out of the Western Canadian basin.

During their recent earnings call, both Tumline oil And Arc resource Pipeline pointed to maintenance as a short -term pinch point for prices. Companies said that the second half of the situation should improve, the point at which LNG Canada’s ramp-up should also be ahead.

In a statement by CBC News, a spokesman from LNG Canadian stated that the initial operation started with train 1, and it will continue to produce as it attaches train 2 and gets into a regular shipping rhythm.

At that point, the statement said, “We guess to load an export cargo from our convenience every two days.”

Once LNG Canada is running on the entire steam, it will attach about 15 export tankers vessels a month as per RBC Note recently to investors. The note states that three export ships were dispatched in July in July and expected to leave in August 7.

Government revenue killed

Heather-Pirot, director of energy, natural resources and environment with the McDonald-Lariers Institute, said that in a certain sense, frequent cheap prices for Canadian natural gas can be a good thing for consumers by putting some pressure from utility bills.

But he said that prices are low, the higher the hit for government revenue in provinces like BC and Alberta, which rely on royalty with natural resources.

In a statement, a BC government spokesperson said that natural gas royalty revenue has declined by $ 82 million in the financial year 2024-2025, which reduces the budget 2024, and reduces royalty rates applied to new wells due to low prices for natural gas.

A spokesperson of the Alberta Provincial Government said that weighing the effects of oil and gas prices for this year is very early, but it is planned to give financial update of the first quarter at the end of the month.

In July, according to RBN Energy, the average benchmark price for Canadian natural gas in Canadian dollars was $ 0.76 per Gigazoule (GJ). As August 13, Prices of this month were made $ 0.40 is more than $ 0.90 per GJ from GJ at least.

McCre with the BMO said that it is unlikely that a glow of natural gas will remain a problem in the next year, in which the producers are already taking. More vigilant approach Compared to record production of 2024.

Exicor-Perot said that too, she is expecting a more balanced position by 2026, although she noted that the nature of commodity prices is that predictions can often prove to be wrong.

Exicor-Perot said, “I (I have thought) that we are already looking at different prices, we are looking right now.” “So, my crystal ball is broken.”