Alberta Gas Reference
The Alberta Gas Reference Price is a monthly weighted average of an
intra-Alberta consumers' price and an ex-Alberta border price, reduced by
allowances for transporting and marketing gas (Gas Royalty Guidelines 1994).
The Gas Reference Price is effective beginning with 1994.
The Crown Royalty regime for
natural gas is price sensitive. The Crown achieves price sensitivity using a
base rate and a higher marginal rate as components of the royalty formula used
to determine the Crown’s royalty share of natural gas. In the royalty formula,
the select price is the price threshold above, which the higher marginal royalty
rate applies. A separate select price is prescribed for each of old gas, new
gas, and pentanes.
To account for inflation, the department adjusts the select price each year
based on the GDP Implicit Price Index. The department calculates the select
price by multiplying the previous years select price by the inflation factor.
This price is published in the annual March edition of the Gas Royalty Calculation Information
Average Market Price
Alberta Energy published a monthly Alberta Average Market Price
(AMP) for natural gas/residue gas. The AMP is given in units of $/1000
3 and $/GJ. The AMP in $/1000 m3 is used in the royalty
rate formula to calculate the Crown's royalty volumes. The AMP in $/GJ is used
in the valuation price test. This test specifies that the minimum valuation
price that may be applied to the Crown's royalty share of production is 80% of
the AMP ($/GJ) in effect during the month of sale.
The AMP was effective for the production years 1988 to 1993.