By Andrew Iraola
Monthly average natural gas spot prices at northwestern US and western Canada border pricing hubs reached historic lows in 2024 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.
At Westcoast Station 2, the western Canada benchmark, the daily spot natural gas price has averaged US$1.04/MMBtu in 2024 through October, reaching its lowest monthly average of US$0.31/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 US$1.87/MMBtu in 2024 through October and reached its lowest monthly average this year of US$0.97/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 began being 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 United States reduced natural gas prices in western Canada and the US Pacific Northwest in 2024.
Production in western Canada averaged 18.2 Bcf/d (515.3 x 106 m3/d) from January through October of this year, 3% more than during the same period in 2023 and 11% more than the five-year (2019 to 2023) average for that period, according to S&P Global Commodity Insights. Producers have been increasing production ahead of the start of liquefied natural gas (LNG) exports from LNG Canada in Kitimat, British Columbia, which is on track to come online by mid-2025.
Natural gas exports to the US Pacific Northwest over this same period averaged 3.7 Bcf/d (104.7 x 106 m3/d), which is 11% (0.4 Bcf/d [11.3 x 106 m3/d]) 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 August 31, natural gas inventories in Canada were 37% (6.5 Bcf [184.05 x 106 m3/d]) above the five-year average.
In the US Pacific region, natural gas inventories have remained consistently above the five-year average so far this year.
About The Author – Andrew Iraola is a research analyst with the US Energy Information Administration.
