Dwindling gas production fuels proposed hike; another blow to struggling Alberta producersNovember 5, 2009 - The dramatic decline in Alberta's natural gas production has created another problem for the hard-hit sector: a surge in pipeline costs.
TransCanada Corp., (TRP-T32.62-0.17-0.52%) which moves most of the province's gas, is warning that its transportation tolls will rise by nearly 50 per cent on its Canadian mainline system next year as it works to maintain profitability in the face of dwindling natural gas production. Based on current prices, the increase will eat away about 10 per cent of revenues for companies who transport gas out of Alberta to Eastern Canada.
The higher costs come as the latest in a long series of punches to the bottom line for Alberta's suffering gas sector. Production in the province fell by about 6 per cent last year, due to the freefall in gas prices, the emergence of new competition in U.S. shale gas reservoirs and changes to Alberta's royalty regime........
