Updated March 2018
Total sulphur production increased in 2017, driven primarily by increases in upgraded bitumen production due to the recovery from the Fort McMurray wildfires and the Phase 3 expansion of Canadian Natural Resources Limited’s Horizon oil sands facility, as well as a slight increase in natural gas production. Table S7.2 [HTML] shows sulphur production from major gas processing plants in 2016 and 2017. Historical sulphur production from the five oil sands upgrader operations is shown in Figure S7.2 [Tableau]. Note that Nexen indefinitely shut in production at its Long Lake upgrader in July 2016.
Production is forecast to increase to 4.4 106 t in 2018 as a result of an increase in upgraded bitumen and natural gas production. However, after 2018, sulphur production is expected to remain flat for the remainder of the forecast period as increasing upgraded bitumen production offsets declining natural gas production.
Figure S7.3 [Tableau] shows the historical and forecast total Alberta sulphur supply and demand, including stockpile additions and withdrawals. Sulphur is fairly easy to store, and imbalances between production and use have traditionally been accommodated through net additions or removals from stockpiles.
Of the sulphur removed from Alberta, an estimated 46 per cent was sent to the United States and 52 per cent was shipped offshore. Alberta offshore exports of sulphur face competition from inexpensive sulphur originating from the Middle East, including from the Shah gas plant in Abu Dhabi.
Sulphur prices at the beginning of 2017 were under pressure as a result of a weaker phosphates market; however, prices began to rally in August due to a combination of factors that increased demand, including the California wildfires, Hurricane Harvey, and increased sulphur purchases from China in response to environmental taxes scheduled to begin in that country in 2018 aimed at reducing greenhouse gas emissions. As a result of increased demand, Free On Board (FOB) Vancouver sulphur prices averaged an estimated US$106.33 per tonne in 2017, an increase of 32 per cent from 2016. In 2018, prices are forecast to weaken as additional volumes are expected from the Brazan project in Qatar and the long-delayed restart of the sulphur recovery units at Kashagan in Kazakhstan, which will move the sulphur market into surplus.
More information on the sulphur forecast can be found in the Methodology section.