Market Snapshot: Imported value of natural gas liquids surpasses export value in 2015

Release Date: 2016-01-06

The value of natural gas liquids (NGLs) imports could exceed the value of NGL exports in 2015 - something that has not occurred in at least 25 years. Data from Statistics CanadaFootnote 1 indicates that Canada’s NGL trade balance has been on a general downward trend for over a decade, and was negative in the first 11 months of 2015. Low export revenues have persisted in 2015 despite recent data indicating that propane export volumes will likely increase this year.

Figure Source and Description

Source: CANSIM Table 228-0059

Description: This chart illustrates Canada’s NGL trade balance from 1990 to 2015 (with data up to and including November 2015). It uses blue bars to show export revenue values, red bars for the cost of imports, and green dots for the difference, which is net export value. The chart shows that net export value generally increased throughout the 1990s and early 2000s, peaked at $1.94 billion in 2005, and has been on a downward trend ever since. 2015 is the first year that net exports are on pace to be negative in 25 years.

The declining value of Canada’s net NGL exports is partly the result of low NGL prices and increased competition from rising U.S. propane production, which has increased 40 per cent since 2011. Key infrastructure developments also played a role, including the commissioning of the Mariner West and Vantage pipelines for ethane imports. Ethane imports were zero in 2013 but are on pace to reach 64 000 barrels per day in 2015. Another key development was the conversion of the Cochin propane export line into a condensate import line in 2014.

While it is uncertain whether this negative NGL trade balance will persist, additional downward pressures are looming. Pembina is expanding its Vantage ethane import pipeline and NOVA is considering expansion of its petrochemical capacity in St. Clair, Ontario. Both developments would lead to higher imports of U.S ethane in the future.

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