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Increased competition in natural gas distributors

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April 08, 2011 – Comments (4)

There's a war in natural gas distribution coming.  Spectra has been going full throttle increasing their capacity.  It has been interesting seeing signs of all the natural gas activity on the highway over the past couple years.  Spectra has been increasing laying a pipeline to increase the delivery capacity 4-fold.  Then about 25km in is another company putting in a 36 inch pipeline planning on delivering sweet gas to the market through Alberta.

From what I understand there is enormous reserves of natural gas already fracked and just sitting there waiting to be piped in.

In any event, this ability to flood the market with supply should be good for consumers.  I am not sure it is so great for producers or distributers...

 

4 Comments – Post Your Own

#1) On April 09, 2011 at 6:57 PM, ikkyu2 (99.18) wrote:

I don't agree.  Natural gas is fungible with a variety of other commodities, most notably oil.  The higher oil prices go, the more the market will turn to NG as a lower-cost alternative.  NG demand is going to skyrocket during the amortizable lifetimes of the pipelines you are describing.

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#2) On April 11, 2011 at 3:49 PM, chk999 (99.97) wrote:

Do you have the same problems with Canadian taxes and limited partnerships that the dread K-1 forms cause in the US?

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#3) On April 17, 2011 at 9:56 PM, dwot (74.24) wrote:

ikkyu2, I think the market will turn to NG as well, but I also think it takes time to make that conversion.  Right now there is so much NG that is fracked and capped, there will be a excess supply for a while.

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#4) On April 17, 2011 at 9:57 PM, dwot (74.24) wrote:

chk999, no idea...  I am not even familiar with what the problems are that you are referring to.

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