CALGARY – Natural gas prices in Western Canada are so low that a partner in the country’s first LNG export project is shutting off money-losing wells and throttling back its exploration program. Malaysian-owned Petronas, which has a 25 per cent interest in the $40-billion LNG Canada project, has been curtailing production by between 50 and 200 million cubic feet per day from wells in northeastern B.C. capable of producing 700 million cf/d, the CEO of its Canadian branch says. The practice is one being adopted by a growing number of western Canadian producers to avoid selling their natural gas at prices that often don’t even cover the cost of pipeline transportation. “We talk a lot about oil infrastructure,” said CEO Mark Fitzgerald of Petronas Energy Canada Ltd. in an interview, referring to oil price discounts in Western Canada blamed on full crude pipelines. “Gas is trapped as well and if you compare the prices that Canadian gas producers are receiving against our U.S. peers, the differentials are significant and costing us a significant amount of money.” The company invested heavily in natural gas exploration in northeastern B.C. from 2012 to 2016, employing more than 25 drilling rigs at peak […]
