MANAGEMENT’S DISCUSSION AND ANALYSIS
The Impact of Natural Gas Liquids With the transformation of natural gas supply in Saskatchewan, the composition of the natural gas in the province has also been changing. Conventional gas supply contains primarily methane. However, natural gas that is produced with oil has a much higher content of other natural gas liquids including butane, propane and condensate, and contains a higher amount of energy than conventional natural gas. Natural gas produced from shale rock also typically has a higher composition of natural gas liquids compared to conventional production. In Western Canada, the primary area of growth in natural gas supply has occurred in the Montney and Horn River shale basins, located along the northern part of the British Columbia and Alberta border. Natural gas containing a high content of liquids is usually processed and the natural gas liquids are separated and sold in the open market. The processed natural gas is then distributed throughout the natural gas pipeline system. In a low price environment it is not always economical to remove the natural gas liquids from the natural gas stream. Natural gas that has a high composition of natural gas liquids has a higher heat or energy content compared to conventional natural gas and less volume is required to generate an equivalent amount of energy. In Saskatchewan, the energy content or heat value of natural gas delivered to consumers has been generally rising since Saskatchewan became a net importer of natural gas seven years ago. This is due to both the higher energy content of natural gas being imported from Alberta, and the fact that natural gas associated with oil production is replacing conventional production within the province. In 2017-18, the average heat value of natural gas delivered in Saskatchewan was relatively stable compared to 2016-17.
Common Components of Unprocessed Natural Gas
Methane
Ethane
Propane Butane Condensates Nitrogen Carbon Dioxide Hydrogen Sulphide Helium
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