Apache discovers huge gas reservoir
Firm calls find best on continent
One of three companies planning a $4.5-billion liquefied natural gas terminal at Kitimat on Thursday announced an “outstanding” new shale gas discovery in British Columbia’s remote and largely unexplored Liard Basin.
The find by Apache Corp. is estimated to contain enough gas in itself to justify doubling the size of the Kitimat terminal it’s proposing with partners Encana Corp. and EOG Resources. The company is calling it the best and highest quality shale gas reservoir in North America, based on the volume of gas three test wells are producing.
Apache, the second largest U.S. independent oil and natural gas producer by market value, said the tests suggest it has 48 trillion cubic feet of marketable gas within its Liard Basin properties.
By way of comparison, all companies active in the Horn River Basin, one of three other major shale gas basins that are in B.C., have marketable gas of 78 trillion cubic feet, giving one company alone a natural gas find that is twothirds the size of the entire Horn Basin.
One well alone produced 21 million cubic feet of gas a day over a 30-day period, the company said.
“This is enormous,” said Gordon Currie, senior oil and gas analyst at Salman Partners. “Those are big, big numbers.”
Based on Apache’s calculations, the Liard could provide B.C. with enough gas to export “for many, many years to come,” Currie said.
Bill Mintz, director of public affairs at Apache, said the Liard discovery provides the firm with enough gas to meet the needs of any future expansion at its proposed LNG terminal. Apache and its partners plan a five-million-tonne-a-year LNG plant which, if supply and demand warrant it, could be doubled to 10 million tonnes a year. The Liard alone could provide that additional five million tonnes of LNG.
The Liard find — tempered by low natural gas prices in North America — is not only large, but the Apache test wells are producing more gas from fewer hydraulic fractures, six per well, as opposed to 20 in the nearby Horn River Basin.
One of the Apache wells, D-34-K, “is one of the best shale wells we have seen in any play,” Apache president Steven Farris said in making the announcement at the company’s annual investors day.
“Our analysis indicates that the formation characteristics are remarkably consistent across this large basin,” he said.
A slide presentation on the find says the drilling in the Liard is “believed to be the most prolific shale gas resource test in the world.”
The Liard Basin is in northeastern B.C., west of the Horn River basin. Most drilling activity is taking place in the central part of the basin, 110 kilometres northwest of Fort Nelson, B.C.
According to a B.C. ministry of energy and mines report on shale gas activity in that province, it remains a relatively unexplored area covering 1.25 million hectares. Apache has drilling rights to 180,000 hectares.
“The good news is; they’ve discovered lots of natural gas up in northeastern British Columbia and you guys should be exporting that gas for many years to come,” said Currie. “The bad news is that they have identified a lot of gas in northeastern B.C. and elsewhere and it has seriously depressed the price of the commodity.”