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Precision Drilling expects rig demand growth with LNG Canada startup
CALGARY — Canada's largest drilling rig company said it will be closely watching the startup of this country's first liquefied natural gas export facility after being caught off guard by the dramatic increase in drilling that took place following the opening of the Trans Mountain pipeline expansion.
Precision Drilling Corp. is Canada's largest drilling rig contractor, and as such, serves as a barometer for the overall health of the country's energy sector.
CEO Kevin Neveu told analysts on a conference call Wednesday that Precision was surprised by the "near instantaneous" uptick in drilling in Western Canada that took place following the opening six months ago of the Trans Mountain oil pipeline expansion.
That pipeline has served to boost prices for Canadian heavy oil. Neveu said as a result, demand for Precision's rigs in this country is at "historic highs."
He said the uptick in demand is coming both from customers drilling heavy oil, as well as those drilling natural gas condensate, which is added by producers to heavy oil to make it less viscous and easier to transport.
Neveu said Precision expects to see Canadian drilling rig demand increase yet again when LNG Canada starts up in mid-2025 and creates a new market for natural gas producers in Alberta and B.C.
This report by The Canadian Press was first published Oct. 30, 2024.
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