Rich Montney Shale resources will let British Columbia (BC) take over from Alberta as the top Canadian natural gas producer jurisdiction within 20 years, according to two separate supply projections.

Alberta falls behind BC in the latest national outlook by the Canada Energy Regulator (CER), Canada’s Energy Future 2020. The gas lead changes in both the Reference scenario, or business as usual, and the Evolving scenario, centered around environmental policy and technology.

In addition, unconventional drilling with horizontal wells and hydraulic fracturing have entrenched Canadian gas growth in a liquid byproducts-rich Montney area within the Fort St. John region of northeastern part of the province, the BC Oil & Gas Commission (BCOGC) said in its latest reserves and production report.

In the CER Reference scenario, the gas lead changes in 2039, when BC pulls ahead with 10.4 Bcf/d and Alberta trails at 10.2 Bcf/d. As of 2050, BC widens its lead to 12.5 Bcf/d while Alberta stays flat at 10.3 Bcf/d.

In the Evolving scenario, CER said the gas lead changes in 2035, when BC edges ahead with 8.6 Bcf/d and Alberta lags at 8.5 Bcf/d. As of 2050, BC production is seen growing to 9.5 Bcf/d, leaving Alberta far behind at 7 Bcf/d.

The long-range Canadian gas supply pattern of BC growth and Alberta erosion is already well established, the agency’s records noted.

BC production more than doubled to a 2020 average of 5.4 Bcf/d from 2.6 Bcf/d in 2005, the CER said. Alberta production over the 2005-2020 period shrank by 25% to 10 Bcf/d from 13 Bcf/d. 

As of 2019, the Montney formation accounted for 98.6 % of wells drilled, 86% of production and 84% of reserves in the province, the BCOGC noted.

The Montney is considered paramount to supplying gas to the Royal Dutch Shell plc-led LNG Canada export project underway in BC. TC Energy Corp.’s Coastal GasLink initially is to transport more than 1.7 Bcf/d from the Montney, Horn River and Cordova basins.

LNG Canada, under construction in Kitimat, BC, is expected to come online by the mid-2020s. Initially, the project is to consist of two liquefaction trains that together would provide 14 million metric tons/year of LNG. There also is an option to expand to four trains in the future.

Alberta-based gas producers lead the supply source migration out to the northeastern BC region known as the “near frontier” in the industry, the BCOGC activity records found.

Denver-based Ovintiv Inc., formerly Calgary’s Encana Corp., heads the Top 10 list for Montney development in BC. Ovintiv is followed by Arc Resources Ltd., Petronas Energy Canada Ltd., Tourmaline Oil Corp., Shell Canada Ltd., Painted Pony Energy Ltd., Murphy Oil Corp., Pacific Canbriam Energy Ltd., Canadian Natural Resources Ltd. and Black Swan Energy Ltd.

Canadian Natural in August made a takeover bid for Painted Pony to build its Montney resources. ConocoPhillips also is building an arsenal in the Montney following a $375 million bolt-on purchase from Calgary-based Kelt Exploration Ltd.

A Montney geological sweet spot, rich in premium byproducts such as propane and condensate or natural gasoline, attracts most BC drilling into a zone west of the Alaska Highway near Fort St. John. Top wells yield liquids exceeding 100 bbl/MMcf of raw gas, the BCOGC said.

“Producing wells continuously increased over the years, from 88 in 2005 to 3,619 by the end of 2019,” the commission said. 

Technical advances and bonus liquid byproducts offset notoriously volatile gas prices in BC. Annual producing well additions in BC peaked in 2014 at 533 and declined thereafter, to 356 in 2019. 

“However, gas production has increased, illustrating improvements in per-well performance,” the BCOGC said.