Management’s Discussion and Analysis
Saskatchewan Supply and Demand Saskatchewan has been downstream of transportation bottlenecks in Alberta since 2018. For the first time since 2018, NGTL made primary capacity to the Alberta-Saskatchewan border available to the market (to begin flowing in 2026); this Open Season was met with strong demand as the capacity was fully subscribed with multi-decade commitments from shippers. The availability of incremental transport remains a high-priority variable and SaskEnergy is looking at several ways to increase the province’s import capacity reliably and affordably. Saskatchewan Natural Gas Prices The AECO daily index averaged $2.32 per GJ through the 3 months ended June 30, 2023. The year-over-year decrease from $6.86 per GJ was largely a function of lower 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 $0.06 per GJ premium compared to $0.34 per GJ the year prior. Daily capacity from AECO to TEP has been readily available this year causing the spread to flatten out; the market continues to price in risk of larger spreads through July as maintenance upstream will limit the availability Alberta exports. The following chart shows AECO natural gas prices:
AECO Monthly Index Historical Prices
$8.00
Limited Export Capacity from Alberta
$7.00
Forward Price at June 30, 2023 Average Price: $3.48/GJ
$6.00
2015-Present Average Price: $2.61/GJ
$5.00
$4.00
$3.00
$2.00
$1.00
$0.00
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
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