Two natural gas producers have decided to suspend production from certain wells because of the volatility of the reference price in Canada, the AECO price, which was even in negative territory in August.
The Tourmaline company, one of the largest producers in Canada, reduced its daily production by 1.5% and delayed the operation of several platforms by one month.
Kelt Exploration has also temporarily shut down a few wells to push up the price of natural gas.
The energy crisis in Europe has increased gas prices, but Canadian producers face a bottleneck in exporting their product.
Maintenance work on TC Energy’s Nova Gas Transmission Line (NGTL) system has reduced export capacity at a time when companies have increased their production volume. According to the press release from Kelt Exploration, restrictions on natural gas storage and an incident with a compressor have exacerbated the problem.
The gigajoule of AECO natural gas barely exceeded $1 at the start of September, while the same volume reached between $8 and $9 in the United States.
The announcements of the two companies, however, helped to push the AECO price back above $4.
AECO prices could remain volatile in September and October as maintenance activities on the system NGTL continuehowever, said the Kelt company in its press release.
What is the AECO award?
Prices at the AECO (Alberta Energy Company) Hub, located at the gas storage facilities in Niska, Alberta, are the Canadian benchmark for natural gas on the NOVA Gas Transmission Ltd. system. (
Source: Canada Energy Regulator (New window)