Oil & Gas Sector January 8, 218 Weekly Canadian Natural Gas Supplement With the warm up in Alberta and what appears to be the worst of the cold weather in the eastern half of North America starting to back off, AECO prices have started to settle back to a depressing weak reality. After running up near C$4 per mcf a little more than a week ago, prices have moved back under C$2 per mcf in recent days. In contrast, prices at the Empress border (see map on page 5) have remained elevated, in some cases, very elevated, with highs reaching more than C$15 per mcf on January 3. Although Empress prices have also started to back off in recent days, they remain well above those of AECO. We believe that there have been a series of physical short squeezes in the market, seen in many physical trading hubs across North America, and Empress was part of this chaos. Industry observers are also telling us that the wide disparities between Empress and AECO pricing are indicating that there is yet another physical capacity limitation on the TCPL-Alberta system that is preventing sufficient volumes of gas leaving the AECO hub to the higher attractive prices at Empress, resulting in the wide AECO-Empress price spreads. There is no doubt that the intense cold of the past two weeks across much of North America has pushed the physical capacity of the gas delivery system to its limits. Daily records were seen in the our pipe scrape data with Alberta demand hitting an all-time high of 7.4 bcf on December 29, Ontario demand hitting its second highest on record of 6.18 bcf on January 5, and individual daily storage withdrawal records set for Canada at 9.1 bcf on December 31 and for eastern Canada on January 1 at 5.32 bcf. On the other side of the equation, supplies from Western Canada have been busy recovering from the well freeze-offs seen in the late days of December. We estimate supplies have recovered to near 17 bcf/d over the weekend, just short of the more than decade-high record for supplies set on December 23 at 17.14 bcf. Despite the record busting nature of the recent weather, it has done little to undermine Alberta gas storage levels. These remain just above five-year highs and we expect that the cumulative withdrawal this heating season will be just average, leaving storage levels at the high end of the historic range by the end of March, suggesting weak prices for the balance of 218. Canadian Natural Gas Supply-Demand Balance bcf/d Daily Month-to-Date Date 12/3/17 12/31/17 1/1/18 1/2/18 1/3/18 1/4/18 1/5/18 1/6/18 Jan-17 Jan-18 Difference % Chg. Domestic Production 14.86 15.21 15.61 16.44 16.67 16.87 17. 17.3 15.89 16.6.71 4.5% Imports from U.S. 2.39 2.27 1.67 1.97 2.35 2.92 3.24 3.39 3.64 2.59 (1.4) -28.7% LNG Regas.35.44.53.59.3.45.57.57.4.5.46 1146.5% Total Supply 17.6 17.91 17.82 19.1 19.32 2.24 2.8 21. 19.57 19.7.13.7% Domestic Demand 16.49 16.75 16.8 15.44 14.26 15.24 15.76 15.66 13.62 15.41 1.79 13.1% Exports to U.S. 1.2 1.6 1.58 1.67 1.29 1.55 1.46 1.17 9.34 1.45 1.11 11.9% Total Demand 26.51 26.81 26.66 26.12 24.55 25.79 26.21 25.82 22.96 25.86 2.9 12.6% Net Storage Swing (8.62) (9.1) (8.45) (7.51) (5.) (6.1) (5.79) (5.64) (3.39) (6.4) (3.1) Implied S-D Balance (8.91) (8.89) (8.84) (7.11) (5.23) (5.55) (5.41) (4.83) (3.39) (6.16) (2.77) Diff. Stor. vs Balance (.29).12 (.39).41 (.23).46.38.82. Notes: All data subject to revision; domestic demand is end user demand only. Martin King (43) 262-625 Nate J. Heywood, CFA (43) 262-622 mking@gmpfirstenergy.com njheywood@gmpfirstenergy.com AECO Natural Gas Spot Prices Week Avg. Prior Wk Avg. Change Wk Avg Last Yr. Change $2.498 $2.623 -$.125 $3.86 -$.588 C$/mcf $5 $4 $3 $2 $1 $ ($1) For the Week Ending: Jan. 5, 218 216 217 218 Jan-1 Mar-25 Jun-17 Sep-9 Dec-2, Canadian Enerdata $5 $4 $3 $2 $1 $ ($1) Prepared by GMP Securities L.P. See important disclosures on the last page of this report
E Estimated Daily Canadian Natural Gas Supply Prior 14 Alberta British Columbia Saskatchewan West. Canada East. Canada Canada Total Days mmcf/d mmcf/d mmcf/d mmcf/d mmcf/d mmcf/d Dec-24-217 11,559.3 5,51.9 366.7 16,977.9 172.6 17,15.5 Dec-25-217 1,994. 4,92.8 346.8 16,261.6 162.4 16,424. Dec-26-217 1,673.1 4,934.9 335.4 15,943.4 162.4 16,15.8 Dec-27-217 1,832.7 4,78. 347.7 15,888.4 163.6 16,52. Dec-28-217 1,75.8 4,724.1 351.5 15,826.5 173.9 16,.3 Dec-29-217 1,147.6 4,737.8 341.1 15,226.5 162.4 15,388.9 Dec-3-217 9,795. 4,573.6 327.8 14,696.4 165.5 14,861.9 Dec-31-217 9,954.2 4,76.4 326.9 15,41.5 165.5 15,27. Jan-1-218 1,132.4 4,978. 317.4 15,427.7 184.8 15,612.5 Jan-2-218 1,882.7 5,32.2 353.4 16,268.3 176.5 16,444.8 Jan-3-218 11,168.2 4,958.2 371.4 16,497.8 173.4 16,671.2 Jan-4-218 11,36.5 4,997.4 359.1 16,717. 15.3 16,867.4 Jan-5-218 11,395.5 5,55.5 375.2 16,826.2 17. 16,996.2 Jan-6-218 11,441.9 5,86.8 349.6 16,878.3 153.1 17,31.4 Notes: All values are estimates and subject to revision; B.C. estimates include small volumes from the NWT., TCPL, Alliance Pipeline, Enbridge, TransGas Canada West Natural Gas Supply Canada East Natural Gas Supply bcf/d 17.5 17. 16.5 16. 15.5 15. 14.5 14. 13.5 Jan-1 Mar-25 Jun-17 Sep-9 Dec-2 Daily Gas Field Receipts 216 217 218 17.5 17. 16.5 16. 15.5 15. 14.5 14. 13.5 7 Day Mov. Avg. Field Receipts mmcf/d 4 35 216 217 218 25 2 15 5 Jan-1 Mar-11 May-2 Jul-29 Oct-7 Dec-16 4 35 25 2 15 5 Estimated Monthly Canadian Natural Gas Supply Prior 13 Alberta British Columbia Saskatchewan West. Canada East. Canada Canada Total Months mmcf/d mmcf/d mmcf/d mmcf/d mmcf/d mmcf/d Jan 217 1,545.1 4,897. 372.2 15,814.4 28.3 16,22.7 Feb 217 1,444.4 4,815.8 383.1 15,643.3 172.8 15,816.2 Mar 217 1,667.2 4,677.7 385.4 15,73.2 177.2 15,97.4 Apr 217 1,597.2 4,42.9 414. 15,432.1 18.9 15,612.9 May 217 1,39.9 4,529.9 382.2 15,222. 174.2 15,396.1 Jun 217 1,491.5 3,754.3 382.4 14,628.1 166.9 14,795. Jul 217 1,66. 4,92.6 376.6 15,75.2 156.2 15,231.4 Aug 217 1,232.2 4,339.4 383.7 14,955.3 154.4 15,19.6 Sep 217 1,492.8 4,373. 39.7 15,256.5 161.1 15,417.5 Oct 217 1,629.4 4,429.7 47.8 15,466.9 161.5 15,628.4 Nov 217 11,63.4 4,782. 391.9 16,237.3 158.1 16,395.4 Dec 217 11,174.6 4,854.6 383.1 16,412.2 174. 16,586.2 Jan 218 11,63.5 5,18. 354.4 16,435.9 168. 16,63.9 Notes: All values are estimates and subject to revision; B.C. estimates include small volumes from the NWT., TCPL, Alliance Pipeline, Enbridge, TransGas 2
Estimated Daily & Monthly Canadian Natural Gas Storage Activity Prior Days Alberta British Columbia Saskatchewan West. Canada East Canada Total Canada & Months mmcf mmcf mmcf mmcf mmcf mmcf Dec-3-217 (3,59.5) (23.8) (489.2) (4,283.5) (4,34.1) (8,623.7) Dec-31-217 (3,463.5) (32.7) (48.7) (4,264.9) (4,746.9) (9,11.8) Jan-1-218 (2,386.5) (394.2) (349.8) (3,13.6) (5,32.6) (8,451.1) Jan-2-218 (1,835.5) (41.7) (49.6) (2,646.8) (4,865.9) (7,512.7) Jan-3-218 (952.5) (436.9) (22.9) (1,61.3) (3,385.6) (4,995.9) Jan-4-218 (1,353.5) (441.6) (37.7) (2,165.8) (3,842.1) (6,7.9) Jan-5-218 (749.5) (458.9) (31.) (1,518.4) (4,272.7) (5,791.1) Jan-6-218 (691.5) (44.2) (192.4) (1,288.1) (4,353.8) (5,642.) Oct 216 (7,737) 2,172 478 (5,88) 1,787 (3,31) Nov 216 (2,87) (3,349) 332 (5,824) (3,3) (8,827) Dec 216 (45,144) (8,288) (8,44) (61,476) (43,2) (14,495) Jan 217 (32,113) (9,45) (6,567) (48,13) (49,621) (97,751) Oct 217 9,354 7,562 38 16,954 15,56 32,1 Nov 217 (21,437) (4,342) (3,488) (29,267) (5,866) (35,133) Dec 217 (29,375) (5,833) (4,729) (39,937) (58,2) (98,138) Jan 218 (7,969) (2,538) (1,854) (12,36) (26,41) (38,41) Notes: All values are estimates and subject to revision., TCPL, Alliance Pipeline, Enbridge, TransGas, Union Gas Canadian Natural Gas Storage Activity Canadian Natural Gas Storage Levels mmcf/d Daily Injections/Withdrawals 5, 3, 1, (1,) (3,) (5,) (7,) (9,) Jan-1 Mar-11 May-2 Jul-29 Oct-7 Dec-16 9 8 7 6 5 4 2 216 217 218 5 Yr. Hi-Lo 217 218 Estimated Daily & Monthly Canadian Natural Gas Storage Levels bcf Jan-1 Mar-11 May-2 Jul-29 Oct-7 Dec-16 Daily Storage Level Prior Days Alberta British Columbia Saskatchewan West. Canada East Canada Total Canada & Months bcf bcf bcf bcf bcf bcf Dec-3-217 42.87 4.19 16.41 477.47 29.52 686.99 Dec-31-217 417.41 39.86 15.93 473.21 24.77 677.98 Jan-1-218 415.2 39.47 15.58 47.8 199.45 669.53 Jan-2-218 413.19 39.7 15.17 467.43 194.59 662.2 Jan-3-218 412.23 38.63 14.95 465.82 191.2 657.2 Jan-4-218 41.88 38.19 14.58 463.65 187.36 651.1 Jan-5-218 41.13 37.73 14.27 462.13 183.9 645.22 Jan-6-218 49.44 37.33 14.8 46.85 178.73 639.58 # End Oct 216 455.21 5.37 3.8 536.37 265.26 81.63 # End Nov 216 452.4 47.2 31.13 53.55 262.26 792.81 # End Dec 216 47.25 38.73 23.9 469.7 219.24 688.31 # End Jan 217 375.14 29.28 16.52 42.94 169.62 59.56 # End Sep 217 458.87 42.48 24.11 525.46 253.78 779.24 # End Oct 217 468.22 5.4 24.15 542.41 268.84 811.25 # End Nov 217 446.78 45.7 2.66 513.14 262.97 776.12 # End Dec 217 417.41 39.86 15.93 473.21 24.77 677.98 Notes: All values are estimates and subject to revision., TCPL, Alliance Pipeline, Enbridge, TransGas, Union Gas 9 8 7 6 5 4 2 3
Estimated Daily & Monthly Net Natural Gas Exports Prior Days PADD I PADD II PADD IV PADD V Exports Imports Canada & Months mmcf/d mmcf/d mmcf/d mmcf/d mmcf/d mmcf/d mmcf/d Dec-3-217 1,482.9 3,295.4. 2,851.3 1,17.1 2,387.4 7,629.6 Dec-31-217 1,59. 3,372.9 1. 2,826.2 1,59.1 2,269. 7,79. Jan-1-218 1,991.8 4,71.6. 2,84. 1,577.1 1,673.7 8,93.4 Jan-2-218 1,775.6 4,27.3. 2,898. 1,672.9 1,972. 8,7.9 Jan-3-218 1,391.8 3,532. 1. 3,13.6 1,291. 2,352.6 7,938.4 Jan-4-218 1,617.8 2,847.6 (1.) 3,164.3 1,548.7 2,92. 7,628.7 Jan-5-218 1,768.4 2,389.5 1. 3,55.8 1,455.9 3,241.2 7,214.6 Jan-6-218 1,641.9 2,119.9 (1.) 3,12.9 1,166.5 3,392.8 6,773.7 Oct 216 (438.3) 3,4.9. 3,45.1 7,517.3 1,59.6 6,7.8 Nov 216 (38.9) 2,765. (.1) 2,94.4 7,834.9 2,546.5 5,288.4 Dec 216 484.3 2,388.8 (.3) 3,117.4 9,438.6 3,448.5 5,99.1 Jan 217 389.7 2,611.8 (.1) 3,85.9 9,632.1 3,544.8 6,87.3 Oct 217 (413.6) 3,658.3 (.) 2,799.7 8,2.7 2,156.3 6,44.4 Nov 217 (18.2) 2,953.8.1 3,17.7 8,729.7 2,938.3 5,791.4 Dec 217 661.9 2,713.8.2 3,75.2 9,344.7 2,893.6 6,451.2 Jan 218 1,697.9 3,164.6. 2,997.4 1,452. 2,592.1 7,859.9 Notes: All values are estimates and subject to revision., TCPL, Alliance Pipeline, Enbridge, TransGas Canadian Natural Gas Net Exports Canadian Natural Gas Demand mmcf/d Daily Net Exports 9, 8, 7, 6, 5, 4, 3, 216 217 218 Jan-1 Mar-25 Jun-17 Sep-9 Dec-2 9, 8, 7, 6, 5, 4, 3, bcf/d 7 Day Moving Average 17 15 13 11 9 7 5 3 215 216 218 Jan-1 Mar-11 May-2 Jul-29 Oct-7 Dec-16 17 15 13 11 9 7 5 3 Estimated Daily & Monthly Natural Gas Demand Prior Days BC AB SK MB ON QC NB/NS CANADA & Months mmcf/d mmcf/d mmcf/d mmcf/d mmcf/d mmcf/d mmcf/d mmcf/d Dec-3-217 934.8 6,852. 1,424.8 55.7 5,489. 97.6 315.6 16,492.5 Dec-31-217 929.8 6,95. 1,37.2 467.3 5,785.7 987.4 32. 16,747.5 Jan-1-218 929.3 6,45. 1,296.7 421.2 5,739.1 972.1 32.2 16,83.7 Jan-2-218 934.2 6,7. 1,162.2 438. 5,554.6 954.2 33.2 15,443.4 Jan-3-218 848.9 6,55. 1,142.2 454.6 4,475.8 956. 325.5 14,257.9 Jan-4-218 838.3 6,74. 1,154.5 476.4 5,417.7 958.9 316.6 15,236.4 Jan-5-218 789.8 5,951. 1,137. 437.3 6,178.8 933.7 33.2 15,757.8 Jan-6-218 724.8 5,749. 1,29.7 385.4 6,56. 921.6 338.7 15,655.2 Oct 216 482.9 4,67.6 738.3 172.5 2,44.8 49.8 131.7 8,731.8 Nov 216 585.3 4,952.9 79.3 29. 2,653.4 618.3 155.5 9,964.6 Dec 216 898.2 5,778.7 1,4.3 339.5 3,832.4 737.9 231.3 12,858.3 Jan 217 878.9 5,655.9 1,2.4 342.3 3,894.2 759. 241.3 12,791.8 Oct 217 496.1 4,769.7 782.1 176.2 1,689.6 473.4 199.2 8,586.4 Nov 217 699.3 5,667.8 1,1.3 289.6 3,137. 732.7 242.6 11,779.2 Dec 217 825.5 6,37. 1,89.8 363.9 4,248. 844.9 277.9 13,687. Jan 218 844.2 6,5.7 1,153.7 435.5 5,645.3 949.4 326.9 15,45.8 Notes: All values are estimates and subject to revision; B.C. estimates include small volumes from the NWT., TCPL, Alliance Pipeline, Enbridge, TransGas, Union Gas 4
Natural Gas Pipeline Flows in Western Canada - Week Average Ending Jan. 5, 218 British Columbia Avg. Field Receipts: 4,98 mmcf/d Avg. Demand: 886 mmcf/d Station 2 Montney Alberta Avg. Field Receipts: 1,67 mmcf/d Avg. Demand: 6,33 mmcf/d Alliance 1,914 mmcf/d Saskatchewan Avg. Field Receipts: 347 mmcf/d Avg. Demand: 1,241 mmcf/d Huntingdon-Sumas 864 mmcf/d Deep Basin Kingsgate-Eastport 2,86 mmcf/d AECO Empress 3,65 mmcf/d Monchy-Port of Morgan 1,553 mmcf/d 5
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