Michael Blair

Canadian dry gas outlook

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Low storage and cold winter have the potential to increase natural gas prices quickly.  Egress issues from the WCSB are the problem. The TransCanada expansion schedule for 2020 start up will help but is by no means enough to clear the market.  https://www.transcanada.com/en/announcements/2018-02-15transcanada-announces-$2.4-billion-expansion-to-increase-market-access-for-wcsb-supply/  LNG Canada's final investment decision for the Kitimat project will increase takeaway from Northeastern B.C. but most of the gas will come from dedicated sources leaving little for independent producers.  https://globalnews.ca/news/4504804/government-officials-lng-canada-project-official-tuesday/  The real key to improved industry economics will be disciplined capital spending keeping production close to egress capacity to avoid major price disruption.  The industry has lacked discipline for many years with key players overspending cash flow to increase production in the hope that transportation constraints won't limit output.  Any thought?

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