Tag Archives: Ziff Energy

‘No LNG exports, no growth’ in Western Canada

Experts warn that without a LNG export market on the British Columbia’s west coast, there will be no growth in the industry.

Forecasts have Western Canada’s natural gas production growing by 5 billion cubic feet (Bcf) per day by 2022. However, the forecast includes that amount as being attributed to LNG exports. Without the exports there will simply be now growth in market where competition is growing on a global basis. With no LNG export terminal, Canada’s only customer would be the USA who is now the largest producer of natural gas on the planet.

In a recent report, Simon Mauger, Director of Natural Gas & Economics at Ziff Energy:

“Growth in Western Canada will depend on market growth, first and foremost. So no LNG exports, no growth. With the LNG exports, we expect to see quite some growth — from about 14 bcf a day today up to 19 bcf a day in 2022.”

Recently Apache Energy dropped out of the Kitimat LNG project in BC. Kitimat LNG is considered by many as being the most advanced of the 15 LNG projects under consideration. Likely only two, perhaps three we be built. Chevron Canada the remaining partner in the project is looking for another suitable partner to replace Apache.

Read More:“No LNG exports, no growth’ in Western Canada’s natural gas industry: expert”

Read More: “Apache Energy, under investor pressure, exiting Kitimat LNG project”

 

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Shale gas technology continues to evolve and bring down costs

Technology for unlocking natural gas and oil from tight shale rock formmation continues to evolve and bring down the costs of shale exploration and development. Lower costs make shale development more competitive and more economic to explore further.

Graphical representation of Packers Plus' StackFRAC system

Graphical representation of Packers Plus' StackFRAC system

To meet demand  for more stimulation stages in horizontal wells, Packers Plus launched its new 20 stage StackFRAC(R) HD “High Density” Multi-Stage Fracturing System. The system allows for “increased production through longer laterals and shorter stage lengths; costs are further reduced by smaller frac strings and liner sizes.”

Where only two years ago, major companies exploring shale gas used a price of $6 to $8 for shale  gas wells to break-even. The break-even point for most companies is now below $4, and expected to fall further making shale gas (and oil) a very attractive investment proposition for exploration and development companies. Any increase in current prices for natural gas would lead to a profit win fall. It is one of many reasons why companies are investing millions of dollars into shale gas areas like BC’s Horn River basin.

The average conventional gas well in Western Canada produces about 250,000 cubic feet of gas a day. Major producers like EnCana Corp. and Exxon Mobil are reporting initial results from their Horn River wells that use multistage technology are coming on at initial rates of 11, 18 and 20  million cubic feet per day. In addition, shale gas wells are usually lower pressure, and longer life as compared to conventional wells. With upfront costs coming down with technology innovations like Packer Plus’ StackFRAC system, the economics will continue to attract investment capital to shale gas, and the Horn River basin.

Bill Gwozd, a gas supply analyst for Ziff Energy in Calgary is quoted:

“If you can get more bang per well, it becomes more efficient to exploit and root out the basin. We’re bullish, but some producers are even more bullish than that.”

PR Newswire: Packers Plus launches new 20 stage completion system

* Recommended reading – Calgary Herald: Packers Plus leads drilling revolution