- A huge liquefied natural gas export terminal led by Shell, called LNG Canada, may struggle to dramatically raise Canadian natural gas prices when it starts operating next year because a flood of pent-up supply is waiting to hit the market, analysts said.
Advantage Energy became the latest producer to announce temporary curtailments on Tuesday. The Calgary-based company began shutting in up to 130 million cubic feet a day of dry gas last month. Even with that huge demand boost the AECO futures market indicates prices will reach only C$2.46 a gigajoule in September 2025, around C$1.20/gj less than the forward strip was suggesting a year earlier."Right now prices are not signaling there's going to be a big windfall in 2025, the forward strip has come down significantly," said Jean-Paul Lachance, CEO of Peyto Exploration, Canada's fifth-largest gas company.
LNG Canada said in a September update the facility is 95% complete and remains on track to deliver first cargos by mid-2025.LNG Canada should reduce volatility in the AECO market, which is prone to big price swings because of limited storage capacity, said BMO Capital Markets analyst Jeremy McCrea.