Canadian Supply Demand Balance

Demand for natural gas that is required to heat the bitumen for oil sands projects in Alberta is expected to represent 80% of the expected demand growth in 2007 and 2008 period. It seems the potential coal to gas substitution in the Ontario electricity market is delayed beyond the 2008 period but this could change as environmental and health concerns about burning coal intensify. Estimating demand growth for space heating is difficult due to the impact of weather variations. Reports estimate that the demand the commercial office space in Canada will grow about 3% over the next few years. Residential demand is expected to be relatively flat.

Canadian annual gas demand is expected to rise by just under 34 million m3/day (1.2 Bcf/d) between 2005 and 2008. Gas deliverability is projected to increase by under 8.5 million m3/day (0.3 Bcf/d) over the same period. So the already tight supply versus demand balance situation is expected to tighten by a further 25.5 million m3/day by 2008.