Friday 29 Mar 2024
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KUALA LUMPUR (Dec 24): Petroliam Nasional Bhd (Petronas), which owns a 25% stake in the C$40 billion (about RM123.27 billion) LNG Canada project, has been curtailing production by up to 200 million cubic feet per day (cf/d) from wells in northeastern British Columbia due to low prices of liquified natural gas (LNG).

The Canadian Press, quoting Petronas Energy Canada Ltd CEO Mark Fitzgerald, reported that the LNG wells in northeastern British Columbia are capable of producing 700 million cf/d of LNG.

“We talk a lot about oil infrastructure. Gas is trapped as well and if you compare the prices that Canadian gas producers are receiving against our US peers, the differentials are significant and costing us a significant amount of money,” Fitzgerald said.

It was reported that Petronas Energy Canada invested heavily in natural gas exploration in northeastern British Columbia from 2012 to 2016, employing more than 25 drilling rigs at peak times to prove the resource potential as part of its longer-term plan to build an LNG export terminal.

"It is running only one rig now," Fitzgerald said in the report.

The Canadian Press reported that curtailing LNG production is a practice being adopted by a growing number of western Canadian producers to avoid selling their natural gas at prices that often do not even cover the cost of pipeline transportation.

The Canadian Press, quoting IHS Markit associate director Ian Archer, reported that condensate wells typically contain high levels of natural gas and the boost in gas production back to over 16 billion cf/d overwhelmed pipeline capacity and dropped gas prices this year to a projected C$1.43 per gigajoule. The price is about one-third of the price in 2014, the news agency reported.

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