Montney’s gas resources one of the largest in the world
CALGARY – The National Energy Board (NEB or Board), the British Columbia Oil and Gas Commission, the Alberta Energy Regulator, and the British Columbia Ministry of Natural Gas Development jointly released this month the first study ever to estimate the marketable unconventional petroleum resources in the Montney Formation.
Recent advances in technology, such as multi-stage hydraulic fracturing, have made it possible to economically develop unconventional gas and oil in the Montney Formation over the past several years, but little had been known about its total potential. The report estimates that there is approximately:
• 12,719 billion m3 (449 Tcf) of marketable natural gas;
• 2,308 million m3 (14,521 million barrels) of marketable natural gas liquids (NGLs); and
• 179 million m3 (1,125 million barrels) of marketable oil.
Although the findings for marketable NGLs and oil are notable, the estimated quantity of natural gas is extensive.
Excerpts from the first publicly released study, which examines the marketable, unconventional petroleum potential of the Montney Formation includes:
Background
The Montney formation of Alberta and British Columbia (see map on right) has been the target of oil and gas exploration since the 1950s, with industry traditionally focussing on the Montney’s conventional sandstone and dolostone reservoirs.
These conventional reservoirs are encased in siltstone, which represents a far greater volume of rock within the formation and also contains oil and gas.
However, Montney siltstones remained undeveloped until 2005, when advances in horizontal drilling and multistage hydraulic fracturing made it possible to economically develop this extensive, unconventional siltstone resource.
Geological Description
The Lower Triassic Montney Formation is aerially extensive, covering approximately 130,000 km. It is also thick, typically ranging from 100 metres to 300 metres it thins to zero as its eastern and northeastern edges while increasing over 300 metres on its western side, before it begins out-cropping in the Rocky Mountains. Most of the formation consists of siltstone, containing small amounts of sandstone, that originally collected in the bottom of the deep sea, whereas more porous sandstones and shell beds were deposited in shallow water environments to the east.
The depth of the formation also increases from Northeast to Southwest generally along with increasing reservoir pressures and decreasing natural gas liquids and oil content. Thus, reservoir characteristics vary widely across the formation.
Methodology
For British Columbians, the Montney was assessed, using a process similar to the one used in a 2011 study of the shale gas resources in the Horn River Basin.
In the Horn River Basin assessment, the volume of free gas and absorbed gas was determined by connecting map grids of geological data to free gas and absorbed gas equations. This way, gas volumes could be estimated by location and capture, how the geological nature of the shales changed from place to place.
The Montney assessment was expanded to include NGLs and oil, which are not present in the Horn River basin to any significant degree. Dissolved gas which is gas that is dissolved in oil deep underground but is liberated at surface under lower pressures, was also estimated for the Montney.
Altogether, in place and marketable petroleum resources were determined for dry natural gas, NGLs, and oil. Only over-pressured areas were included in the British Columbia analysis, because unconventional development so far been limited to over pressured areas. For the Alberta portion of the Montney, the in-place volumes of dry natural gas, NGLs and oil had already been estimated in the Alberta’s two resources studies. Full development was assumed to occur in deeper areas as these have a higher chance of being over pressured according to pressure depth data. Shallower areas are expected to have only partial development because they are typically under-pressured. Thus, a “development risk” factor was applied to shallow areas, as well as lower recovery factors.
Assessment results
The Montney’s marketable unconventional gas resources is one of the largest in the world.
To further illustrate the size of the Montney, total Canadian natural gas demand in 2012 was 88 billion m3 (3.1 TCF) making the monthly gas resource equivalent to 145 years of Canada’s 2012 consumption.
In addition, the Montney is already considered one of Canada’s most economic gas plays. Even though it is only in the early stages of development, its 2012 production rose to an average 48.6 million m3/d of (1.7 Bcf/d) out of a total Canadian marketable gas production of (13.9 Bcf/d).
It is expected that monthly gas production will continue to increase and grow its share of Canadian production. By combining this marketable gas assessments with prior estimates the total ultimate potential in the Western Canada Sedimentary Basin has more than doubled to 23,249 billion m3 (821 TCF). Out of this total 17,898 billion m3 (632 TCF) is remaining, after cumulative production to year end 2012, is subtracted.
The ultimate potential for natural gas should be considered an estimate that will evolve, likely growing over time as additional unconventional potential can be found in unassessed shales, such as those in the Liard Basin, north of Fort Nelson,British Columbia and the Duvernay, formation of Alberta.
Overall, Canada has a very large remaining natural gas resource base in the western Canada Sedimentary Basin to serve its markets well into the future.
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