Market Snapshot: Canadian natural gas production hits a record high in 2023, and industrial gas use continues to increase

Release date: 2024-06-26

Canadian natural gas production increased in 2023, averaging 17.9 billion cubic feet per day (Bcf/d)^Footnote 1. In December 2023, production reached 18.8 Bcf/d. In fact, Canadian production averaged above 18 Bcf/d for eight months in 2023.

While Alberta production increased by 2% from 2022 to 2023, British Columbia (B.C.) production rose by 7% with continued development of Montney Formation tight gas. Liquids-rich Montney gas production is generally the most economic production in Canada and is expected to continue growing. Some partners^Footnote 2 in LNG Canada may also be ramping up their production to prepare for the startup of the project, which is expected by the middle of 2025.^Footnote 3 Saskatchewan natural gas production was declining the last few years but increased by 1% in 2023. Total production from other provinces and territories remained level.^Footnote 4

Figure 1: Natural Gas Production by Province and Territory

Consistent natural gas exports and increasing industrial demand over the last decade

Total natural gas supply^Footnote 5 in Canada—production plus imports—averaged 20.3 Bcf/d in 2023. This was the first year that supply in Canada averaged above 20 Bcf/d. Of this supply, 39% (7.9 Bcf/d) was exported. The remainder of supply was used in Canada. The industrial and other category^Footnote 6 consumed 33% (6.6 Bcf/d) of supply. Electricity generation consumed 2.1 Bcf/d, the residential sector consumed 1.7 Bcf/d (mainly for space heating, water heating, and cooking), and the commercial sector consumed 2.0 Bcf/d.

Figure 2: Natural Gas Supply and Disposition in Canada

Industrial demand increased over the past decade and was a key driver of natural gas demand growth in 2023. The oil and gas sector, especially Alberta’s oil sands, is a large consumer of natural gas and increasing production levels is a key driver of natural gas use^Footnote 7.

Electricity generation from gas-fired turbines has increased over time, particularly as units that use coal-fired generation have retired. Before 2020, demand for gas from electricity generation was the smallest category in Figure 2, since 2020, the residential sector has become the smallest category.

Natural gas demand in the residential and commercial sectors, as well as imports and exports of natural gas in and out of Canada, have, for the most part, remained fairly level over the last decade with only commercial demand having a slight upward trend.^Footnote 8

Date modified:

2024-06-26