Management’s Discussion and Analysis
Saskatchewan Supply and Demand Like 2022, the maintenance season on pipelines upstream of Saskatchewan was very busy. There were numerous outages, and one major in-line inspection even presented the prospect of a firm curtailment on deliveries to Empress – something that hasn’t occurred in decades. However, unlike 2022, the market impact of this work was minimal. Alberta prices were relatively stable throughout the summer with no sharp drops down to $0 per GJ (or less). Price spreads between locations were relatively flat and often below the cost of incremental transport – minimizing the opportunity to profit from the value of storage and transportation assets. Saskatchewan Natural Gas Prices The AECO daily index averaged $2.46 per GJ through the three months ended September 30, 2023. The year-over-year decrease from $3.94 per GJ was largely a function of lower continental and global prices. Traditionally, most natural gas in Saskatchewan (TEP) is priced at a differential to the AECO price. This AECO to TEP differential for the quarter averaged $0.05 per GJ premium compared to $1.80 per GJ the year prior. As previously discussed, despite heavy maintenance, daily capacity from AECO to TEP has been readily available this year causing the spread to flatten out. The following chart shows AECO natural gas prices:
AECO Monthly Index Historical Prices
$8.00
$7.00
Limited Export Capacity from Alberta
Forward Price at September 30, 2023 Average Price: $3.41/GJ
$6.00
2015-Present Average Price $2.61/GJ
$5.00
$4.00
$3.00
$2.00
$1.00
$0.00
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