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Canada Natural Gas Rises on Speculation Rig Drop Will Cut Supply

Dec. 21 (Bloomberg) -- Canadian natural gas rose on speculation that a reduction in drilling will help stem a glut of the home-heating fuel.

Alberta gas rose 1.1 percent. The number of U.S. rigs drilling for gas was down to 818 last week, the lowest since January 2010, according to data compiled by Baker Hughes Inc. New York gas futures have declined 28 percent this year as stockpiles of the fuel have increased.

“The producing region continues to bleed rigs,” Eric Bickel, a natural gas analyst with Summit Energy Services in Louisville, Kentucky, said in a note today.

Alberta gas for January delivery rose 3 cents to C$2.82 a gigajoule ($2.60 per million British thermal units) at the close of trading at 5 p.m. New York time on NGX, a Canadian Internet market.

Gas traded on the exchange is shipped to users in Canada and the U.S. and priced on TransCanada Corp.’s Alberta system. NGX Alberta gas has fallen 22 percent this year.

Gas for January delivery rose 2.7 cents, or 0.9 percent, to settle at $3.155 per million Btu on the New York Mercantile Exchange.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.9 billion cubic feet, 94 million above its target.

Gas was flowing at a daily rate of 2.78 billion cubic feet at Empress, Alberta, where the fuel is transferred to TransCanada’s main line.

At McNeil, Saskatchewan, where gas is transferred to the Northern Border Pipeline for shipment to the Chicago area, the daily flow rate was 2.16 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 419 million cubic feet. The system was forecast to carry 2.02 billion cubic feet today, about 83 percent of its capacity of 2.44 billion.

The volume on Spectra Energy’s British Columbia system, which gathers the fuel in northeastern British Columbia for delivery to Vancouver and the Pacific Northwest, totaled 2.88 billion cubic feet at 4:05 p.m.

To contact the reporter on this story: Gene Laverty in Calgary at glaverty@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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