Northwestern US and western Canada border pricing hubs monthly natural gas prices have reached historic lows this year through October.
According to data from Natural Gas Intelligence, robust natural gas production in western Canada, where output has generally increased over the last two years, and high natural gas inventories in the region contributed to the low prices, reported the US Energy Information Administration (EIA).
At Westcoast Station 2, the western Canada benchmark, the daily spot natural gas price has averaged $1.04 per MMBtu in 2024 through October, reaching its lowest monthly average of $0.31 per MMBtu in September.
Located near Fort St John, British Columbia, close to natural gas production activities in the Western Canadian Sedimentary Basin (WCSB), Westcoast Station 2 is a key pricing hub for gauging production and available supply in the regional market.
At Northwest Sumas, the main pricing hub for natural gas in the US Pacific Northwest, the daily spot price averaged $1.87 per MMBtu in 2024 through October and reached its lowest monthly average this year of $0.97 per MMBtu in May.
The monthly average price for the first 10 months of this year is the lowest for this period of any year since data was first collected for this hub in 1998.
Relatively high natural gas production in the WCSB since the end of 2022 and relatively high natural gas exports into the western US reduced natural gas prices in western Canada and the US Pacific Northwest this year.
Production in western Canada averaged 18.2 bill cu ft per day from January through October, 3% more than during the same period in 2023 and 11% more than the five-year (2019–23) average for that period, according to the data collated by S&P Global Commodity Insights.
Excluding the disruption caused by the Donnie Creek wildfire in May, 2023, producers have been increasing production ahead of the start of LNG exports from LNG Canada in Kitimat, British Columbia, which is on track to come online by the middle of next year.
Natural gas exports to the US Pacific Northwest over the same period averaged 3.7 bill cu ft per day, which is 11% (0.4 bill cu ft) more than the five-year average.
Because natural gas production has risen in advance of demand for natural gas for LNG exports, more natural gas has gone into storage.
As of 31st August, natural gas inventories in Canada were 37% (6.5 bill cu ft) above the five-year average, according to the Canadian Gas Association
In the US Pacific region>, natural gas inventories have remained consistently above the five-year average so far this year.
The Jackson Prairie underground storage facility, operated by Puget Sound Energy, is the largest natural gas storage facility in the Pacific Northwest, with a working gas capacity of 24.6 bill cu ft. As of 31st October 31, 2024, it was more than 90% full.
