Western Canada’s Montney-sourced natural gas production has been on a remarkable upward trajectory in the past decade. Most of this growth has been focused in one province: British Columbia. However, that progress has not come without difficulty. A key challenge during BC’s gas boom has been providing sufficient pipeline takeaway capacity — the hurdles include the BC Montney’s remoteness, various regulatory impediments, and the unique geologic nature of the play. For this amazing gas supply growth story to continue well into the future, more pipeline capacity needs to be constructed. In our concluding blog on the Montney, we discuss recent pipeline developments and the challenges still ahead.
You might say that natural gas-producing formations with immense reserves are only as good as the pipelines that ship the gas to end-use markets. Through the mid-2010s, Marcellus/Utica production suffered growing pains as midstream companies struggled to keep up with sharply rising pipeline takeaway needs, a topic we first discussed in our 50 Ways to Leave the Marcellus Drill Down Report seven years ago and continued to revisit countless times since. Producers and midstreamers in Western Canada’s prolific Montney formation have faced a similar dilemma, and with the Montney’s pivotal role in the region’s overall gas supply growth, the push is on to develop more takeaway capacity sooner than later.
We provided a short primer on the Montney in Part 1 of this blog series. Spanning parts of Alberta and British Columbia (BC) and covering about 50,000 square miles (Figure 1), the Montney is roughly two-thirds the size of the Permian Basin in Texas and New Mexico, and lies sandwiched between the Duvernay and Deep Basin. Its reserves as of 2019 were pegged at 576 Tcf, and its gas production has risen from zero in 2005 to more than 7 Bcf/d as of February 2021, or about 45% of all the gas produced in Western Canada.
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