In all the hoopla surrounding the Marcellus Shale’s natural gas resources and its access to East Coast markets, it may be easy to forget that the Haynesville Shale was once the toast of the gas world. To Encana Corp., it still is.

Yes, the Calgary-based producer is slowing its gas-weighted production in North America and moving to oil and liquids-rich development in Alberta’s Deep Basin, as well as the emerging Duvernay, Tuscaloosa Marine and Collingwood shales. But no, it’s not forgetting the Haynesville/Mid Bossier play, which extends from East Texas into North Louisiana. In fact, Encana is embracing it, especially as talk turns to increasing natural gas use in transportation markets and liquefied natural gas (LNG) exports.

The company is perfectly situated to take advantage of all forms of natural gas from the Haynesville, said Encana’s David Nicks, vice president of USA Gas Marketing. He and his colleagues discussed the shale’s potential during a conference call on Monday. Encana’s “vision for the future” sees a “vast displacement potential for natural gas,” which bodes well for future Haynesville development, said Nicks.

Today natural gas accounts for about 25% of total Bcfe/d of North American energy consumption. But Encana expects gas consumption to grow to 110 Bcfe/d, or 30-35%, by 2030. The biggest gains will be in electric power generation. However, Encana also is counting on big gains from LNG and compressed natural gas transportation, as well as LNG exports.

Encana also is walking the walk, he said. The company is a 30% stakeholder in the promising Kitimat LNG terminal that would be built along the west coast in British Columbia; the terminal has received federal approval and a final investment decision is expected in 2012. In addition, the company has two “mini” liquefaction projects in Alberta and Colorado that will be able to provide up to 13,000 LNG gal/d of fuel for 150 Class 8 trucks. And it is using CNG within its operations: five stations were opened and 53 trucks were converted in 2010. Nine of its drilling rigs now are fueled by natural gas.

The Haynesville Shale today is the largest gas producer in the country, said Nicks. And hence, Encana is keen to keep it in the public’s eye.

“Haynesville production has grown to approximately 6.5-7 Bcf/d in the past five years,” said Nicks. With the production comes proximity and substantial pipeline connectivity to the demand center on the U.S. Gulf Coast, he noted. The Haynesville is “ideally” situated on the gas pipeline grid: more than 20 Bcf/d of new pipeline capacity has been added to the region over the past five years. Encana has about 650 MMcf/d of downstream pipeline capacity.

“There currently is more than 5 Bcf/d of spare capacity” across the region, said Nicks. “This increased connectivity has resulted in very tight price spreads across the region. As a result, Haynesville production is sold at only a slight discount to the Henry Hub benchmark.”

Haynesville, he noted, also is “within 200 miles of one of the largest, and fastest growing natural gas demand centers. In 2010 industrial gas demand along the U.S. Gulf Coast industrial corridor was about 6 Bcf/d. Up to 6.6 Bcf/d of potential new demand exists if several LNG export projects are sanctioned along the Gulf Coast: Freeport LNG, 1.8 Bcf/d; Lake Charles LNG, 2 Bcf/d; Sabine Pass LNG, 2 Bcf/d; and Sasol’s proposed gas-to-liquids facility, which would be able to export 0.8 Bcf/d.”

The Haynesville Shale “is critical to North America’s global energy competitiveness,” said Nicks.

“We have seen global recognition of the low-cost natural gas environment in North America. Given this we expect strong medium- and long-term demand growth in the form of electric power generation, with coal plant retirements and growth; industry growth, LNG exports, natural gas vehicles and gas-to-liquids facilities.”

Encana doesn’t think all of the Haynesville is prospective. The company now has around 350,000 net acres in Texas and Louisiana that lie in the Haynesville/Bossier regions. However, over the coming few years the company plans to cull around 100,000 net acres from its holdings to focus on the most prospective leasehold, said Eric Marsh, senior vice president of the USA Division.

Encana has had several years to perfect its technology in the hard rock. After making its initial entry in 2006 the company in 2008 drilled and completed 10 wells. In 2009 the count grew to 61 wells and a year later, 287 wells had been drilled. By the end of this year an estimated 505 wells should be producing, said Paul Sander, vice president of the Mid-Continent Business Unit. The Haynesville development holds an estimated 5.1 Tcfe of proved, probable and possible reserves and has “economic contingent resources” — or a high estimate — totaling 15.6 Tcfe, he said.

In the initial Haynesville Shale rush three years ago many producers came and thought they had conquered the play before laying down rigs as gas prices fell. But not Encana. Using its “resource play hub execution,” the company now is driving to reduce its total supply costs to less than $3/Mcf.

“This is the largest gas play in North America,” and it continues to be a top performing gas asset for Encana, said Sander. Most of the land that Encana plans to retain is now held by production; it will spend about $150 million in 2012 for land retention activities and a bit in 2013, but for the most part, the land is locked up, Sander explained.

Encana already holds the record for single section deliverability from a Haynesville well, with a 200 MMcf/d gross peak rate. Engineers have been refining the drilling techniques to determine the potential, which may be higher in the Mid-Bossier, he said. Ten wells were completed between April and June, with 175 completion stages pumped. Testing now is under way on well density on 80- and 40-are spacing to validate the reservoir stimulation.

Using its resource play hub, Encana has reduced its moves to 15 hours from 44 hours and cut its plug and perforation time by 60%. The average completion stages pumped per crew per month have improved 100% since January 2010, Sander noted.

Another thing that Encana has discovered is that longer laterals are better. In 2009 the company’s laterals were around 3,600 feet with 70-foot cluster spacing. Last year lateral length was increased to 3,900 feet and cluster spacing was reduced to 55 feet. This year the laterals have been about 4,300 feet and it’s using customized clusters.

For 2012, it will be “long laterals and continuous completion evolution,” with laterals of 7,500 feet and “optimized job size,” said Sanders.

Encana was granted its first cross-unit permits for the longer laterals by Louisiana regulators and already has drilled its first cross-unit well. Sander explained that the company has successfully drilled two long laterals — 6,879 feet and 8,003 feet — which has led to a 13% jump in recovery rates.

“Our future plans are for 10,000-feet laterals,” said Sander. Overall, drilling the longer laterals will reduce Encana’s footprint, as well as “development traffic,” he said.