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Canada in scramble to hold gas volumes Fleet utilization rate expected to be at 53 percent in 2007, with 16,800 natural gas completions, 5,202 from coalbed methane By Gary Park Petroleum News Canadian Contributing Writer
Canada’s fleet of drilling rigs will grow from 710 today to 790 in 2007, when it will achieve an average utilization rate of 53 percent.
In the process, conventional natural gas well completions will climb to 16,800 in 2007 from 16,300 this year, while coalbed methane wells will rise to 5,202 from 3,148.
Despite all those positives, the Western Canada Sedimentary basin will make only a negligible gain in production and not enough to appreciably affect the forecast growth in North American consumption.
The National Energy Board expects Canada’s gas deliverability will edge up only 2.4 percent over these two years to 17.3 billion cubic feet per day.
Daily conventional output from the basin will actually shrink by 300 million cubic feet to 16 billion cubic feet, but that loss will be more than offset by a tripling of coalbed methane volumes to 900 million cubic feet. In addition, Nova Scotia’s offshore will briefly return to its peak 500 million cubic feet in 2007.
But those forecasts are a sign that Canada’s share of the North American market will decline over the rest of this decade. Ziff: Mackenzie won’t flow before 2012 Ziff Energy Group predicted in October that continental consumption will grow by 10 billion cubic feet per day to 78 bcf per day by 2012, powered by a 50 percent increase in gas demands for power generation, which the Calgary-based firm forecasts will reach 25 bcf per day within seven years.
Ziff said that because of the lead time needed for coal-fired and nuclear generators, electricity demand growth will be supplied by currently underutilized generating capacity in existing gas-fired power plants.
It does not expect gas from the Mackenzie Gas Project to come on stream before 2012.
The National Energy Board report points to a further troubling trend in the Western Canadian Sedimentary basin, where production from existing wells is now declining by 20 percent a year, which requires an all-out drilling effort just to replace those lost volumes.
However, it is counting on a continuing high level of upstream activity, with conventional drilling growing by 13 percent over the next two years.
“High usage of the medium and deep rigs (in the Alberta Foothills and northeastern British Columbia areas) and the relatively high level of prospectivity of conventional gas in these areas will drive the projected increase in the number of gas connections,” the board said. Rig utilization headed up The current statistics, at least, offer some comfort, with Canada headed for the highest rig utilization rate since 1997.
The Canadian Association of Oilwell Drilling Contractors reports that an average 502 rigs or 68 percent of the fleet was at work through the first 10 months of 2005, compared with the blazing pace in 1997 when 83 percent of 497 available rigs were active.
However, the fleet size has grown steadily since 1997 to an average 738 this year and 757 in the first week of November.
The board’s breakdown for the forecast period points to Alberta conventional gas slipping 500 million cubic feet per day to 12.5 billion; British Columbia to add 20 million cubic feet per day to 2.8 billion; and Saskatchewan to remain flat at 700 million cubic feet.
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