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Oil & Gas

According to the British Columbia Oil & Gas Commission’s 2022-23/2024-25 Service plan, “B.C. raw natural gas production is forecast to increase 18 per cent by 2026/27, primarily driven by strengthening energy prices, demand anticipated from postpandemic economic recovery, LNG related growth, and export demand for natural gas liquids. B.C.’s Montney formation is a large resource base capable of responding to these economic conditions and is expected to be the focus of B.C.’s exploration and development activity.”

The Montney basin stretches across northwestern Alberta and northeastern British Columbia. The National Energy Board estimated in 2013 that, as a whole, the Montney Formation contains 449 Tcf of marketable natural gas, 14,521 million barrels of marketable NGLs, and 1,125 million barrels of marketable oil.

Recent years have seen technology breakthroughs that have led to significant improvements in well-productivity and lower operating costs. While Veresen lead processing expansion by completing construction of their Tower, Sunrise, and Saturn facilities, adding 1 Bcf/d of processing capacity. 

LNG Canada

On October 1, 2018, the largest private investment in Canadian history was announced by LNG Canada in their commitment to build their $40 billion Liquified Natural Gas export terminal. In October 2021, the company reported reaching 50% completion. Included in the project is the Coastal Gas Link pipeline that will transport the gas required by the facility from the Dawson Creek region in northeast B.C. to the LNG export terminal in Kitimat on B.C.’s north coast. The facility will liquify between 1.7 and 3.5 Bcf/d of gas, largely sourced from the area surrounding Dawson Creek. The low estimate is based on the initial startup of 2 of the 4 possible production “trains.” With current production capacity in the region at 2.9 Bcf/d, the project is sure to result in a further surge in exploration, processing, and transportation capacity for the region.   

In April 2022, The Globe and Mail reported that Shell is studying the feasibility of proceeding with the second pair of production trains, “to potentially use lower-carbon hydroelectricity from BC Hydro to power motors for supercooling natural gas into liquid form… Shell estimates global demand for LNG will surpass 700 million tonnes a year by 2040, up almost 90 per cent from last year.”

With each well drilled, gas plant commissioned, and compressor station built, long-term, well-paying jobs are secured for local service, transportation, construction, and hospitality industries.  And it’s these industries, along with the rest of the spin-off economic activity, that are sure to keep Dawson Creek thriving and vibrant for decades to come.

Getting “Super Liquids Rich” in BC’s Montney

The majority of the growth and investment in the Montney Basin in the last several years is thanks in large part to its “Super Liquids Rich” composition.  This and other natural gas liquids (such as propane) extracted during drilling and processing make for profitable economics for operators in the area, even in periods of low natural gas commodity prices.

Opportunities abound for downstream marketing of propane as well with the AltaGas Ridley Island Propane Export Terminal which opened in 2019 and Pembina’s Prince Rupert Export Terminal, which began exporting in 2021. The two facilities provide up to 65,000 bbl/d of export capacity.

Previously, Canada had been exporting propane through US terminals.

Read more at: BC Oil & Gas Commission, 2020 Oil and Gas Reserves and Production Report