Alberta natural gas production fell during the third quarter when prices tanked, but as the snow begins to fly in Western Canada, there are signs of recovery for the hard-hit sector.

Natural gas prices in Alberta slumped during the July-to-September period, averaging only 61 cents per thousand cubic feet. In turn, western Canadian production averaged 18 billion cubic feet (bcf) per day, down 1.5 billion bcf per day from highs seen earlier this year, according to a TD Cowen report.

Excess gas in inventory and feeble prices in Alberta that dipped into negative territory in September prompted some producers to scale back drilling, shut in output or pay someone to take their gas.

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However, benchmark AECO natural gas prices in Alberta have “recovered off the bottom” to about $2 per thousand cubic feet as cooler temperatures signal the return of the winter heating season, while the LNG Canada project is exporting more supercooled gas to Asia — and production volumes in Western Canada have started to grow again, TD reported.

“AECO is looking to be much more balanced this winter on all the fundamentals that we’re seeing,” Advantage Energy CEO Michael Belenkie........

© Calgary Herald