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The Globe and Mail reported that oil sands companies that rely on natural gas to run their operations may face a price squeeze as natural gas costs rise. The companies use gas to create steam to soften oil-rich bitumen deposits.
The Globe and Mail reported that oil sands companies that rely on natural gas to run their operations may face a price squeeze as natural gas costs rise. The companies use gas to create steam to soften oil-rich bitumen deposits.
Gas prices for the May contract are currently up to $4.62 per million British thermal units on the New York Mercantile Exchange.
As quoted in the publication:
If the price of natural gas climbs by one dollar, operating costs per barrel for such projects jumps by about the same amount, experts say. Companies without extensive natural gas operations of their own feel the most pain. MEG Energy Corp., for example, lacks natural gas operations, while Suncor Energy Inc.’s oil sands operations far outstrip its natural gas business.