Tag Archives: Montney basin

Shale gas part of BC economic growth solution

For years the Horn River News has been covering the benefits of natural gas, its new found abundance in shale gas and huge opportunity for British Columbia has from shale gas assets and its advantageous proximity to the Asian market.

The last three years have been since dramatic changes in the North American natural gas market. Low prices, abundant resources, lower demand have all contributed in changing the North American market for good. The US is the largest producer in the world and no longer imports the vast amount of natural gas from Canada as it once did and the Canadian natural gas industry is suffering from it as they have no other distribution channel for selling natural gas.

As the Canadian natural gas enters a new era, the world is once again facing the possibility of  a global recession. Canada will fare better then others but the Canadian economy will not grow as once projected with nearly all analyst reducing their growth projections for Canada by a half to full percentage point.

When shale gas was discovered in northern British Columbia the Province of BC filled provincial coffers with billions of dollars from selling exploration licenses to energy companies large and small eager to tap into the Horn River and Montney basin. The money was welcomed as the global financial markets were about to be shaken. The Province committed hundreds of millions for infrastructure to support the shale gas industry of northern BC. But much more needs to be done; to save and grow the natural gas industry in Canada and BC

With both the EU and USA now stumbling again. The world is holding its collective breath again. Markets are shaking, data is suggesting economies are contracting and people have lost confidence in the market, the economy and their politicians.

Canada has been incredibly fortunate. The Federal Government of Canada has guided the country through the global recession without bankrupting the the country. Canada is likely to stave off a recession but growth will remain very sluggish.

In BC, and Canada the time for natural gas is now. Soft economic markets present opportunities to make long term capital investments that will create needed jobs immediately, and provide immediate and long term economic growth. The Province of British Columbia has been quite supportive of the natural gas industry over the last couple years. Accelerating and increasing this support now would reap needed economic benefits and finally put BC in the international energy market as a provider and export hub.

A recent article in the Vancouver Sun has finally caught up and recognized the importance not only of BC’s shale gas resources as a resource but as an economic driver at a time when the Provincial economy is forecast to soften.

Its simple. Due to our technical ability to economically extract natural gas from shale rock has made natural gas one of the most abundant energy cources in North America. Nearly 90% of Canada’s natural gas was exported to the USA. But the USA has their own shale gas and is the largest producer of natural gas in the world. In fact, plans are underway for the US to start exporting natural gas to energy hungry Asia.

However, the only way the natural gas industry can remain competitive – and worse case stay alive – is to be connected to the international gas market. And herein lies the economic boom opportunity. In order to connect to the international market, pipelines and export terminals are required. A good portion of this infrastructure is underway but more can be done in order to ensure that BC is the preferred export terminal for Asia.

Asia needs energy and demand there is going to increase. Public sentiment for nuclear power in Japan has fallen so in the interim alternative power options will be required and natural gas is a likely contributor.

If you are a reader of the Horn River News, you likely know all the benefits of natural gas as an affordable, cleaner energy alternative to oil and coal. Technology brought the gas out of the shale; technology is squashing environmental concerns for water pollution.

 

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Canada key player in future energy security for APEC economies

On June 19th, Christian Paradis, Canada’s Minister of Natural Resources, participated in the Ninth Meeting of Asia–Pacific Economic Cooperation (APEC) energy ministers promoting Canada’s ability to take a lead role in global energy security. APEC is an intergovernmental forum of 21 economies to facilitate economic growth, trade and investment in the Asia–Pacific region.

In a press release Mr. Paradis was quoted:

“The concept of energy security is evolving. With its abundant energy resources, Canada is an energy powerhouse that can help the world meet its energy needs while reducing environmental impacts.”

Mr. Paradis also commented on the important role of Natural gas stating:

“Natural gas is clean burning, and it is in abundant supply. APEC economies recognize that natural gas is important as we move toward a low carbon economy, and Canada is well placed to play a leadership role.”

BC’s proposed Kitimat LNG facility is stratetically located within hours of the Asia-pacific region and is planned to be operational by 2015 and would be the hub for natural gas / LNG distribution to the Asia-Pacific region with natural gas from British Columbia’s Montney and Horn River basin.

Press Release: Minister Paradis Positions Canada as a Key Player for Future Energy Security of APEC Economies

APEC Ministrial Declaration: Fukui Declaration on the Low Carbon Paths to Energy Security: Cooperative Energy Solutions for a Sustainable APEC

Natural gas in US storage continues to grow

Natural gas in storage increased by 99 Bcf from the previous week to a total of  2,456 Bcf as as of  Friday, June 4, 2010, according to Energy Information Agency (“EIA”) estimates. Stocks were 28 Bcf higher than last year at this time and 310 Bcf above the 5-year average of 2,146 Bcf. Analysts polled by Platts had predicted an increase between 91 and 95 Bcf.

Nothing to add that we have not stated in previous articles on the subject.

Spectra Energy to build natural gas plant in BC

Spectra Energy is a leading gas infrastructure provider

Spectra Energy Corp., has announced it will build a new natural gas processing plant in Northeast British Columbia, west of Dawson Creek.

The plant will serve producers in the Montney basin and have a processing capacity of 200 million cubic feet per day. The processing plant will be built in two phases with the first half of its processing capacity available in late 2011. The remaining capacity is expected to be available in early 2013.

Doug Bloom, president, Spectra Energy Transmission West stated:

“The new plant is an important part of our growth strategy and our now about $1.5 billion investment opportunity in northeast British Columbia. The new plant capacity is fully contracted, further extends our asset base in the rapidly growing Montney natural gas play and will be integrated with our existing natural gas gathering and processing facilities in the area”.

News Release: Spectra Energy Announces Plans for New Processing Plant to Meet the Needs of Montney Producers

Polish shale gas to decrease dependence on Russian gas

HRN has reported numerous times how shale gas will change the geopolitical landscape of the world. More specifically, how new shale gas discoveries in Europe will reduce EU dependence on Russian natural gas, and reduce Russia’s influence on those that depend on Russian natural gas.

According to a recent London Times article Wood Mackenzie estimates that shale gas plays in Poland may reach 48 trillion cubic feet (1,36 trillion cubic metres). The deposits are said to similar to the Montney basin in British Columbia.

ConocoPhillips has plans to start drilling near the Polish coastal city of Gdansk in May  in addition to Exxon-Mobil, Marathon,  and Talisman Energy, who all have projects there. If current expectations are confirmed, Europe’s natural gas deposits would increase by 47% which would provide enough natural gas for Poland for some time and have a significant impact on that region’s dependence on Russian natural gas. Poland currently imports 72% of their gas from Russia.

Oisin Fanning, the executive chairman of San Leon Energy, a British company partnered with Talisman Energy is quoted:

“There is a landgrab under way. Poland is going to emerge as a significant gas producer and there is a lot of interest. All of the majors are coming in and Gazprom is looking at this with some alarm.”

Eager to diversify their energy sources and reduce their dependence on Russian gas, the Polish Government is offering attractive terms. Mr. Fanning is quoted:

“These are some of the best fiscal terms in the world. The Government is creating a very large commercial incentive to develop these deposits.”

Russia’s Gazprom will not lose much financially as natural gas will be sold  to China who is eagerly increasing natural gas usage. However, the influence that Russia may have over Poland and other EU countries may be dramatically diminished without the leverage of natural gas during cold winter months in Poland.

Times Online: Dash for Polish gas could end Russian stranglehold

British Columbia aims to be most competitive natural gas juristiction

(Sorry. Forgot to publish this) Blair Lekstrom, Minister of Energy, Mines and Petroleum Resources for British Columbia recently announced a new $120-million installment for B.C.’s Infrastructure Royalty Credit program to encourage further investment and infrastructure, and stimulate activity in B.C.’s natural gas sector.program.

Quoted in a Provincial government press release, Mr. Lekstrom stated;

“Natural gas markets are very competitive, and producers have plenty of options to invest their capital. This new installment of $120 million in infrastructure royalty credits will help B.C. become the most competitive natural gas jurisdiction in North America. In 2009, we saw natural gas and petroleum rights sales approaching $893 million, the third-largest calendar-year total in B.C. history, and proof that our stimulus for the industry is working.”

Despite recent low natural gas prices, the B.C. Provincial Government, and natural gas producers have been investing heavily in the exploration and development of the Provinces’ Horn River and Montney basins including natural gas plants, pipelines, and a liquid natural gas (“LNG”) plant located in Kitimat, B.C.

Press Release: Royalty Program Improves BC’s Competitive Edge


‘Unconventional gas revolution’ hot topic at conference

According to the Fort Worth Business Press, the hot topic of discussion at the 29th IHS CERA Week in Houston was natural gas. The Horn River News focuses on the great opportunity that shale gas is presenting North American and the world in meeting growing energy demands with a lower carbon natural gas solution.

While the U.S. has seen an estimated 40% increase in the estimated natural gas reserves due to shale discoveries, Canada may see nearly a 100% increase with British Columbia’s Horn River Basin, Montney Basin and others across Canada. This abundant cleaner fuel should represent a greater portion of the overall energy mix in North America.

IHS CERA Chairman Daniel Yergin is quoted:

“This is simply the most significant energy innovation so far this century. As recently as 2007 it was widely thought that natural gas was in tight supply and the U.S. was going to become a growing importer of gas. But this outlook has been turned on its head by the shale gale.”

A common reference was to the 40% increase in energy demand from 2007 to 2030 and the pressures on countries to reduce green house gas emissions.

Statoil President and CEO Helge Lund is quoted:

“I remain certain climate change will be one of the key forces shaping business and policies over the next decades. Dealing with climate change, I’m constantly surprised by the tendency to focus on the most-expensive and difficult measures. I believe the one climate measure in the U.S. and in Europe that has been hugely underestimated and under-communicated has been the use of natural gas… Gas is a climate measure that is available now. With such good arguments, it remains a mystery to me … why decision makers remain somewhat reluctant to fully exploit the benefits of gas. And here I think we all have a promotion challenge ahead of us.”

Philippe Boisseau, president of gas and power at Total is quoted:

“There is a need for gas long-term, and everybody is really right now focused on the oversupply, which is driving prices down in the whole planet, including in the U.S. But very quickly this bubble will be reabsorbed by the growth of gas demand.”

Read the full article. “Unconventional gas revolution” hot topic at conference”

Talisman Energy plans for shale gas exploration in EU

Talisman Energy Inc. a major player  in North American shale gas plays, is exploring opportunities to develop unconventional and shale gas plays internationally. Talisman has substantial holdings in Montney basin in northeast B.C., and Marcellus basin in Pennsylvania

Richard Herbert, Talisman’s executive vice-president of exploration, on a conference call with analysts and reporters is quoted;

“Just in the last six months we’ve started to sort of focus some of our efforts on to looking at international unconventional plays. We recognize Talisman is a big player in North American shale gas now but it’s also a company with international reach so it’s a very good fit for us.”

This past Wednesday, Talisman reported a $111-million loss for the last three months of 2009 due mainly to lower oil and natural gas prices. Like many energy companies, Talisman is shifting major resources into shale gas and looking at shale gas for future growth. Talisman CEO John Manzoni stated:

“This is a critical transition year. We’re building a powerful growth engine as we invest into the shale developments.”

Growing investment and exploration into European and Asian shale gas opportunities is sure to produce results bringing the North American experience of shale gas to other continents.

Two Alberta companies propose land fill sites for shale gas drilling waste

To address the  growing volumes of drilling waste from the  Horn River and Montney shale gas plays in Northeast BC, two Alberta based companies have filed apppropriate applications to build land fill sites to accept and manage contaminated soil that is not allowed in municipal landfills.

  • Calgary-based CCS Corp. proposes to build a  65-hectare landfill 15 kms west of Dawson Creek with a life span of 25 to 40 years. First stage costs estimated at $2.0 million.
  • Calgary-based  Secure Energy Services proposes a 34-hectare landfill 5 kms south of Tupper, BC at a cost of $7.0 million.

Globe and Mail: Secure landfills planned for Dawson Creek area

Horn River kills MacKenzie Valley Pipeline

The Canadian government has decided not to invest in the C$16.2 billion ($15.2 billion) Mackenzie Valley Pipeline, the National Post reported, citing unidentified people.The government has supported the project to date but has now pulled when Jim Prentice, the Environment Minister, took a major financial assistance package proposal to a Cabinet committee last week and it was turned down over concerns about the project’s price tag – according to National Post sources.

But the bottom line here is that the massive discoveries in “shale gas” have made the Mackenzie Valley pipeline financially unattractive. While there is an estimated seven trillion cubic feet of gas in the Beaufort Sea, there is an  estimated 1,000 trillion cubic feet of gas shale deposits in shale deposits across key locations in North America including British Columbia’s Horn River and Montney basin. Its not the cost of the pipeline, its the fact it does not make economic sense with technology unlocking natural gas across closer to end customers.

In Canada, pipeline development will focus on pipelines from the Horn River basin to Kitimat, BC, and pipelines frmo the Alberta oilsands south to the US, and possibly west to Kitimat to open new markets for the oilsands to China.

National Post: Pipeline dream in peril