By end of May Canadian gas output was up 2.1 percent

Gary Park

Marketable natural gas production across Canada grew by 2.1 percent in the first five months of 2004, thanks to higher output in British Columbia and Saskatchewan, according to Statistics Canada, a government agency.

The volumes rose to 2.58 trillion cubic feet from 2.52 Tcf a year earlier, with British Columbia posting a 7 percent gain to 428 billion cubic feet and Saskatchewan climbing to 106 billion cubic feet from 101 billion in the first five months of 2003.

Alberta edged up only marginally to 1.96 Tcf from 19.5 Tcf, while Nova Scotia and northern Canada were both down.

The struggles in Nova Scotia were compounded July 22 when Shell Canada, a 31.3 percent owner of the Sable offshore field, reported that its second-quarter share of production slumped to 129 billion cubic feet from 142 billion.

At that rate production for 2004 would average about 412 million cubic feet per day for export to the U.S. Northeast, far from the short-lived peak of 550 million cubic feet per day and at the lower end of a forecast 400 to 500 million cubic feet per day for the year.

That is despite the introduction late last year of the Alma field, which has a targeted 120 million cubic feet per day. South Venture, with projected recoverable reserves of 300 billion cubic feet, is due on stream later this year.

Shell has led the way in dramatically slashing its estimates of Sable reserves, effectively lowering the total for the field, which started producing in 1999, to 1.35 trillion cubic feet from an initial 3.6 Tcf, and shrinking the projected lifespan by 10 years to 2014.