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Wouldn't It Be Nice - British Columbia's Montney Gas Play Revived with New First Nations Agreement

Natural gas production in Western Canada has been enjoying a steady revival in recent years, heavily assisted by enormous growth in the unconventional Montney gas formation. A sizable portion of this formation lies in the westernmost province of British Columbia, but also underlies a large contiguous land area in that province which has been the subject of land access and development issues with the province’s First Nations residents. As a result of a legal decision made in June 2021, future natural gas production growth was thrown into question as new well licenses, crucial for future gas well development, were placed on hold until a new agreement could be reached. In the nick of time, a new agreement was announced last month. In today’s RBN blog, we discuss the implications on future natural gas drilling and production.

Canada’s westernmost province, British Columbia (BC), has been on the rise for more than a decade as one of the most promising regions in North America in which to drill for unconventional natural gas. Specifically, the Montney formation, a sizable portion of which underlies the northeast corner of the province, has been the primary force powering the province’s — and Western Canada’s — natural gas output to new records on a near-monthly basis. We felt the Montney to be so important that we dedicated an entire five-part series to it, with our recent Part 5 installment underscoring what continues to be incredibly strong, and rising, well productivity and production from this enormous resource.

From humble origins back in the mid-2000s, BC’s portion of the Montney is now responsible for just over one-third of all the natural gas produced in Western Canada (as of December 2022) based on data from our Canadian NATGAS Billboard (left graph in Figure 1). On its own, the BC Montney has grown almost uninterrupted over the past decade, with record-high production being notched in December 2022 at 6.2 Bcf/d (right graph).

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