Tourmaline Oil Corp. chief executive Michael Rose. The CEO hinted at the company’s ambitious plans for growth on a conference call with investors on Thursday. (Credit: Brent Calver\/Postmedia files) <\/p>\n
Two of the country\u2019s largest natural gas producers announced new or accelerated growth plans this week \u2014 betting better days are head for the sector despite Western Canadian gas prices that are currently \u201cwell below\u201d the cost of supplying the fuel to markets.<\/p>\n
Tourmaline Oil Corp.<\/a>, Canada\u2019s largest natural gas producer, announced plans this week to grow production 30 per cent by 2031 \u2014 echoing predictions from TC Energy Corp. and others that demand for natural gas across North America will accelerate in the next decade. Still, natural gas prices in Western Canada<\/a> are currently hovering near 40-year lows.<\/p>\n \u201cWe will be a materially larger, more profitable company right about the time that we expect the continent to be getting short on resource,\u201d Tourmaline chief executive Mike Rose said Wednesday, outlining plans for an initial $350 million spend in northeastern British Columbia\u2019s Montney shale gas region.<\/p>\n \u201cWe can slow down if prices aren\u2019t cooperating, or we can accelerate if prices are ahead of what we\u2019re expecting,\u201d Rose said, adding, \u201cThat doesn\u2019t seem to happen very often.\u201d<\/p>\n The company also announced a new eight-year supply deal with German energy firm Uniper SE on Wednesday that will provide 80,000 million British thermal units per day (MMBtu\/d) of natural gas to export terminals on the U.S. Gulf Coast beginning in November 2028.<\/p>\n Tourmaline said it aims to increase production to to 850,000 barrels of oil<\/a> equivalent per day (boe\/d) by 2031, up from roughly around 629,265 boe\/d in the first half of this year, with new gas plants and transportation infrastructure.<\/p>\n Rival gas producer ARC Resources Ltd.<\/a> said it is raising its capital spend for the year, closing an acquisition from Strathcona Resources Ltd. and accelerating growth plans for its Attachie project in northeastern B.C.<\/p>\n Despite its optimistic outlook for growth, the company said it has elected to shut-in all of its dry gas production for the moment, amounting to approximately 60,000 boe\/d, until prices recover.<\/p>\n Prices are currently \u201cwell below\u201d the cost of extracting, processing and transporting gas to market, ARC chief financial officer Kris Bibby said on an earnings call Friday.<\/p>\n \u201cWe just refuse to waste the resource when we don\u2019t have to wait that long to make a better rate of return on those assets,\u201d Bibby said, noting the company expects prices in Western Canada will improve later this year and through 2026 as LNG Canada<\/a> continues to ramp up to full capacity at its shipping terminal on the B.C. coast.<\/p>\n Tourmaline and other Canadian oilpatch gas producers are hoping for a recovery in domestic natural gas prices in the second half of the year with the start-up of the LNG Canada facility on B.C.\u2019s northwest coast. <\/p>\n