Pentanes Plus Supply/Demand

 

Pentanes Plus Supply/Demand

ST98

Updated March 2018

Supply

Figure S6.1

  • Pentanes plus (C5+) production increased to an estimated 37.4 thousand cubic metres per day (103 m3/d) or 235.4 thousand barrels per day (103 bbl/d) in 2017, a 4.2 per cent increase year over year.
  • As shown in Figure S6.1 [Tableau], production is expected to grow over the forecast period, reaching 43.8 103 m3/d (275.6 103 bbl/d) in 2027, as a result of natural gas producers continuing to target condensate.

Table S6.1

Table S6.1 [HTML] shows that pentanes plus production is expected to continue to steadily increase over the forecast period; however, the rate at which production increases is expected to vary over the forecast period, with the rate slowing considerably after 2021. This is mainly due to production in Petroleum Services Association of Canada (PSAC) Area 2 increasing up to 2021 before declining through to 2027 as the basin matures. Production from PSAC Area 7 is expected to increase in 2022, with production primarily coming from the Montney Formation. One factor behind this increase is a continued focus by producers on gas production from liquids-rich formations such as the Montney, Upper Mannville, and Duvernay because pentanes plus provides added value due to its higher price compared with other natural gas liquids. Another factor is that producers have implemented field recovery of condensate, which lowers the costs associated with recovery since there are no plant processing fees.

Production is forecast to reach 43.8 103 m3/d (275.6 103 bbl/d) by 2027, which is higher than the AER’s previous forecast of 40.9 103 m3/d (257.4 103 bbl/d) by 2026. This increase is due to a higher natural gas production forecast, in addition to an upward revision to liquid yields to better reflect actual liquids content.

Demand

  • Pentanes plus demand increased to an estimated 101.2 103 m3/d (636.8 103 bbl/d) in 2017, an increase of 8.9 per cent from 92.9 103 m3/d (584.6 103 bbl/d) in 2016. This increase in demand is a result of increased bitumen production due primarily to recovery from the Fort McMurray wildfires and the addition of new oil sands projects requiring diluent for transportation.

Pentanes plus is used as diluent that is blended with nonupgraded bitumen and heavy crude oil to meet pipeline specifications for transportation. Alberta demand for pentanes plus is expected to increase due to forecast growth in nonupgraded bitumen. Nonupgraded bitumen production is projected to increase throughout the forecast period, resulting in a corresponding increase in pentanes plus demand, forecasted to reach 170.4 103 m3/d (1.1 million bbl/d) by 2027. Alberta imports of pentanes plus are also expected to increase over the next ten years to meet the forecast shortfall between the production (supply) of and demand for diluent. Alberta currently imports pentanes plus by rail and pipeline, including Kinder Morgan Canada Inc.’s Cochin and Enbridge Inc.’s Southern Lights pipeline systems.

More information on the pentanes plus forecast can be found in the Methodology section.