Updated June 2025
Figure S1.5 shows the historical and forecast AECO-C natural gas price.
Summary
The average annual price of AECO-C natural gas was Cdn$1.45 per gigajoule (GJ) in 2024, decreasing by 47% from 2023.
In the base case, the AECO-C price is forecast to rebound to Cdn$2.71/GJ in 2025, rising to Cdn$3.82/GJ in 2026 and slowly increase to Cdn$4.37/GJ by 2034.
The tariff case, low-, and high-price cases for AECO-C align with the Henry Hub forecast assumptions.
Under the tariff case, the AECO-C price is expected to average Cdn$1.56/GJ in 2025, reaching US$4.09/GJ by 2034.
Based on the low- and high-price cases, prices are projected to range from Cdn$2.25/GJ to Cdn$7.95/GJ by 2034.
In 2024
The AECO-C price fell more than the Henry Hub price in 2024 due to a combination of factors, including a regional oversupply and warmer-than-expected winter weather, resulting in significant excess inventory and little room for storing additional natural gas. Some natural gas producers in Western Canada reported curtailing production and deferring drilling plans due to the low prices. Lower demand from the U.S. also played a role. Consequently, the AECO-C and Henry Hub price differential widened from US$0.52 per million British thermal units (MMBtu) in 2023 to US$1.29/MMBtu.
Base Case Forecast for 2025 to 2034
Exports and market access: Natural gas exports from Western Canada to the U.S. decreased in 2024, which were partially offset by higher exports to Eastern Canada. Over the forecast period, exports to the U.S. will continue to decline due to increased U.S. natural gas production. Western Canada exports to Eastern Canada are expected to remain steady because additional U.S. natural gas will be directed towards supplying American liquefied natural gas (LNG) export expansions and rising domestic demand, leaving little to no gas available to export to Eastern Canada British Columbia's LNG exports are expected to increase market access for Canadian natural gas sometime in 2025 and beyond.
Domestic demand: Alberta’s demand for natural gas is anticipated to increase over the forecast period, driven by the increasing use of natural gas in power generation, petrochemical plants, hydrogen plants and oil sands projects.
One-Year Tariff Scenario (Tariff Case)
Based on the tariff case assumptions outlined on the Prices and Capital Expenditures home page and the Henry Hub page, the AECO-C price is expected to be 42% below the base case forecast and average Cdn$1.56/GJ in 2025. This decline is due to the 10% U.S. tariff on Canadian energy products, resulting in a widening of the AECO-C and Henry Hub differential but partially offset by a lower exchange rate. The AECO-C price is expected to improve to Cdn$3.16/GJ in 2026, reflecting a narrowing of the differential and higher Henry Hub benchmark prices as tariffs are assumed to be phased out. The differential is anticipated to increase slowly, reaching Cdn$4.09/GJ by 2034, 6.4% lower than the base case and in line with the rise in the Henry Hub price tariff case forecast.
Low- and High-Price Cases
The low- and high-price cases capture the near- and long-term volatility of the AECO C price and are estimated using a 95% confidence interval. The following factors affect the price cases:
Low-price case:
- North American demand is less than expected due to a potential global economic recession.
- North American natural gas production growth is faster than expected.
- Pipeline expansions and LNG projects are delayed or cancelled, causing local and regional bottlenecks and increased gas inventories.
- Oil sands demand growth is constrained due to project deferrals.
High-price case:
- North American demand rises more than expected due to stronger economic growth.
- North American natural gas production growth is slower than expected.
- North American LNG and pipeline capacity rises faster than expected and decreased gas inventories.
- Oil sands demand growth is faster than expected.
