Market Snapshot: Where are Canada's propane inventories for winter demand stored?

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Release date: 2020-07-02

Propane is used mainly as fuel for space heating in houses, shops, and factories. Propane demand, like natural gas, is highest during the cooler winter months. Propane inventories play a vital role in ensuring that excess summer propane production is stored to meet increased winter demand.

Underground facilities in Canada are used to store propane – similar to natural gas – for winter demand. In January 2019, Canadian underground propane storage facilities had a total capacity of 3.3 million cubic meters (21.0 million barrels). Most of the capacity is located in the province of Alberta (46%), followed by Ontario (38%), and Saskatchewan (16%). All underground storage facilities in Canada are salt cavernsFootnote 1.

Figure 1. Canada’s Underground Storage Capacity 2019

Canada’s Underground Storage Capacity 2019
Source and Description

Source: CER, Imperial Oil, Shell, Plains Midstream, Keyera, NOVA Chemicals, Suncor, ATCO

Description: This map illustrates the locations of underground propane storage facilities in Canada. All the facilities located in Alberta, Saskatchewan, and Ontario are salt caverns.

Propane production is year-round. Canadian propane inventories typically build during the summer (when propane demand is lower), and peak in October at the beginning of the heating season. During winter, propane stocks gradually deplete to cover the increased demand for space heating and reach a minimum at the end of the season in April. In October 2019, Canadian propane stocks peaked at 1 313 thousand cubic meters (8.3 million barrels), or 40% of the available storage. This amount is equivalent to 49 days of Canadian winter propane demand or 81 days of summer demand.

Recent measures taken by the United States (U.S.) and Canada to ban non-essential travel across the border due to COVID-19 do not affect the transportation of propane across the border. Canadians can still rely on U.S. propane supply to supplement domestic inventories during winter, particularly in eastern Canada.

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