Market Snapshot: Natural gas coming into Canada from New York, U.S.

Release date: 2018-03-14

For decades the TransCanada Mainline has been used to export natural gas from western to eastern Canada and into New York State. However, the eastern portion of this pipeline is now being used to import natural gas from New York into eastern Canada.

The Niagara [Folder 2695030] and Chippawa [Folder 2921583] terminals were modified and now mainly import gas. Niagara was modified in 2012 and Chippawa was modified in 2015. TransCanada Pipelines Limited received National Energy Board approval [Document 3392379] to modify its Iroquois export terminal in November 2017.Footnote 1 The modifications would allow the Iroquois terminal to switch from an export point to mainly an import point, although it could function as either.

The switch from exports to imports is partially explained by the rapid growth of shale gas production in the Appalachia region in northeastern United States (U.S.), which includes the Marcellus and Utica basins. This area has accounted for most of the U.S. production growth over the last decade, increasing from very little production in 2009 to almost 27 billion cubic feet per day of dry gas production in March 2018. Some of the Appalachian gas now feeds the eastern U.S. market, displacing some of the gas supplied by the Western Canadian Sedimentary Basin gas via the Niagara, Chippawa, and Iroquois terminals.

Source and Description

Source: NEB

Description: The three area charts show monthly natural gas throughput in cubic meters per month at the Iroquois, Chippawa, and Niagara points on the Trans Canada Mainline. The data spans from January 1, 2006 until December 31, 2017.

The Iroquois point displays seasonally fluctuating throughput until mid-2009, with an average throughput of approximately 30 million cubic meters per day. After mid-2009, the seasonal fluctuations increase, reaching as low as zero during the summer months, then back up to above 30 million cubic meters per day during the winter.

The Chippawa point displays increasing seasonality from 2006 through 2011. After 2011, throughput decreases until the switch to imports in late 2015. Afterwards, imports increased up to nearly 4 million cubic meters a day.

The Niagara point also displays seasonal exports and a drop off post 2009. Throughput peaked around 29 million cubic meters a day in 2007, then declined from 2009 to 2012. After the switch to importing in 2012, imports have increased up to more than 19 million cubic meters per day.

Natural gas exports at Iroquois decreased between 2009 and 2017. Although gas throughput is seasonal, declining exports are most notable in the summer months, when throughput is the lowest. These exports have been mainly displaced by U.S. Appalachian natural gas production.

In response to increased shale gas production in the Appalachian area, several pipeline proposals and modifications have either been approved, or are in the regulatory approval process under the U.S. Federal Energy Regulatory Commission (FERC)Footnote 2.

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