The outlook is very strong for natural gas drilling in Western Canada during the next two years, according to the Calgary-based Canadian Energy Research Institute's annual Canadian Natural Gas Producer Survey & Deliverability Outlook. CERI projects that natural gas-directed investment in the Western Canada Sedimentary Basin will grow from C$8 billion in 1998 to nearly C$9 billion by 2001. Survey results and drilling statistics for the third quarter indicate that more than 5,680 successful gas wells will be drilled in Western Canada in 1999, a tremendous increase over 1998's 4,860 successful gas wells, and a new high for the decade. Deliverability is expected to surge along with the well count, although not in direct proportion. The high well count is partially due to the large number of shallow wells operators have been drilling in southeastern Alberta and southwestern Saskatchewan. These shallow wells typically have lower initial productivity than wells in other regions. Nonetheless, producers will significantly augment productive capacity in the Western Canada Sedimentary Basin, adding 3.1 billion cubic feet of gas per day over the 1998-2001 period. That amounts to a 6% average annual increase from the 1998's productive capacity of 16 billion cubic feet per day. CERI says that if producers follow through with their current spending projections, sufficient gas will be found both to replace current production declines and meet expected market demand for Western Canadian gas. In the near term, however, the addition of substantial export capacity-particularly for projects slated for completion in the latter half of 2000-means that the transportation capacity from Western Canada is likely to exceed that demand. "The Western Canadian Sedimentary Basin is moving into a period of tighter supply-demand balance where there is strong potential for a short-term surplus of transport capacity and increased competition among provincial transport systems," says the study's author Robert Mahan. -Peggy Williams
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