2020-21 SaskEnergy Annual Report

Management’s Discussion and Analysis

British Columbia to delivery points in southwest Saskatchewan, the price differentials should remain near the marginal cost of transportation. The following chart shows AECO natural gas prices:

every year for maintenance and construction tie-ins). Barring complications with storage injections, these curtailments should have minimal impact to SaskEnergy and its customers. Access to storage remains a high priority for Alberta pipelines with modifications to storage services expected to be filed with the regulator. This filing is not expected to drastically alter the way storage is accessed; it will provide an opportunity to obtain a firm level of storage access — contrasted with the current, fully interruptible service. The AECO daily index averaged $2.37 per GJ throughout the 12 months ending March 31, 2021 compared to $1.53 per GJ the year prior — the largest portion of the difference coming from more stable summer pricing. While not as strong as other locations, locally, the fourth quarter saw significant volatility averaging $2.96 per GJ compared to $1.93 per GJ the year earlier with some transactions occurring over $10.00 per GJ. Traditionally, most natural gas in Saskatchewan (TEP) is priced at a differential to the AECO price. This AECO to TEP differential for the 12 months ending March 31, 2021 averaged $nil compared to $0.40 per GJ for the year prior. The decreased differential can be attributed to upstream system improvements removing system constraints. As transportation is made more readily available from production areas in northeast Coronavirus (COVID-19) Impact Assessment The COVID-19 pandemic has caused material disruption to businesses and has resulted in an economic slowdown. SaskEnergy has assessed and continues to monitor the impact of COVID-19 on its operations. The magnitude and duration of COVID-19 is uncertain and, if it causes significant disruption for an extended period of time, the impacts to the Corporation will increase. Potential impacts include loss of revenue, supply chain disruption, challenges associated with a remote or unavailable workforce and potential asset impairment.




Limited Export Capacity from Alberta

Forward Price at March 31, 2021


2015-Present Average Price $2.04/GJ







2016 2017 2018 2019



2022 2023 2024


2025 2026

SaskEnergy’s business continuity plans are currently in place while the Corporation continues to effectively operate assets, conduct commercial activities and execute on projects with a focus on health, safety and reliability. SaskEnergy is considered essential for the province of Saskatchewan given the important role the Corporation’s infrastructure plays in providing energy to customers. While it is too early to determine any long-term impacts COVID-19 may have on capital programs, a slowdown of construction activities and capital expenditures related to customers deferring their expansion plans in 2020 were observed.


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