Maturing basins to keep gas prices strong over next decade

Gary Park

Petroleum News Calgary correspondent

North American natural gas prices will remain in the range of US$3.25-$6 per thousand cubic feet over the next decade as the continent’s mainstay basins struggle with an aging process, said TransCanada Chief Executive Officer Hal Kvisle.

But the United States and Canada are not in danger of running out of gas, with the Arctic regions, liquefied natural gas and coalbed methane all expected to play a larger role in meeting needs, he told the Global Business Forum in Banff, Alberta.

The head of Canada’s largest gas pipeline firm said the Western Canada sedimentary basin, U.S. Rockies and Gulf of Mexico are all part of the production growth challenges that will boost market prices over the next 10 years.

“This will be an extraordinarily profitable industry if we can maintain flat production growth in an environment of strong demand, weak supply and high wellhead prices,” Kvisle said.

For now, the Western Canadian sedimentary basin is faced with a decline of 3 billion cubic feet of daily production , despite advances in technology that are enabling operators to squeeze more gas out of the basin.

“I would argue that we’re either in, or very shortly heading for flat-lined production out of Western Canada,” he said.