Really big news from Apache regarding what has been whispered about for most of the past year, a massive discovery in the Liard Basin in British Columbia. Judging from what Apache are saying  this shows the capacity of shale to continually amaze:

One of the energy companies planning a liquefied natural gas terminal at Kitimat announced Thursday “an outstanding” new shale gas discovery, the best in North America, in British Columbia’s remote and largely unexplored Liard Basin.

The find by Apache Corp., one of three partners in the $4.5-billion Kitimat LNG terminal and pipeline proposal, is estimated to contain enough gas in itself to justify doubling the size of the Kitimat terminal. The company is calling it the best and highest quality shale gas reservoir in North America and says its wells are the most prolific in the world, based on the volume of gas three test wells are producing.

Based on the production from those wells, Apache announced 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 in B.C., have marketable gas of 78 trillion cubic feet, giving one company alone a natural gas find that is two-thirds the size of the entire Horn Basin.

Apache are not a company many people have heard of, but they have a strong track record. This is not something to be easily dismissed.  In short, this is (yawn) yet another shale game changer:

One well alone produced 21 million cubic feet of gas a day over a 30-day test period.

“This is enormous,” said Gordon Currie, senior oil and gas analyst at Salman Partners. “Those are big, big numbers.”

Based on Apache’s results alone, the Liard should provide B.C. with enough gas to export “for many, many years to come,” Currie said

Two points: 

According to a ministry of energy and mines report on shale gas activity in B.C., it remains a relatively unexplored area covering 1.25 million hectares. Apache, the largest player in the region, has drilling rights to 180,000 hectares.

In other words, as usual in the shale who wants to be a billionaire story,  we don't want to give you that.  There is even more in the Liard waiting to be discovered. For example another major Canadian player first told me about the Liard in Warsaw end of last year. What if they have even half of the Apache find? What if they have even more?  Where will it go? The issue with the Liard, as with the nearby Horn River and Montney is where will this gas go?  The impact of the Marcellus is already so huge that it is both backing up Alberta to US exports and even Alberta to Ontario and Quebec gas. If it can go east, then it has to go west. Once it goes west to Kitimat and the other planned Canadian West Coast projects, it goes so further west that it ends up east in Japan, Korea, Taiwan and China:

Bill Mintz, director of public affairs at Apache, said the Liard discovery provides the company 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.

This makes any alleged issue of whether or not the US exports gas from the Gulf or Cove Point irrelevant. Qatar, Gazprom and Australia's Woodside have been quick to promote their view that US exports won't happen, but with West Coast LNG already having transportation advantages over the Gulf of Mexico, the Liard discovery could make that a non-issue. Canada could be the wild card in world LNG exports as I have been saying since 2009. Which, if you can keep up with all the various directions, means that gas security of supply in the UK and Europe is even less of an issue, making UK/EU energy policy sound increasingly, mind-blowingly, desperately, wrong.

   

Overall Rating (0)

0 out of 5 stars

Leave your comments

Post comment as a guest

0 / 3000 Character restriction
Your text should be less than 3000 characters

People in this conversation

  • Chilli

    > One well alone produce 21 million cubic feet per day<br /><br />Interesting to compare to a wind turbine:<br /><br />21,000,000ft^3 x o.3 KWh/ft^3 = 6.3M KWh. Divide by 24 hours to get equivalent power = 0.26MW.<br /><br />This is the same average power as a 2MW wind turbine costing $3.5M. Except the gas can be stored and used to deliver power on demand unlike the wind turbine output.

    0 Like
  • ramsés

    Yu miss a 1000 factor. <br />21,000,000ft^3 x o.3 KWh/ft^3/24h= 0.26M KW

    0 Like
  • Chilli

    Well spotted. Yes I missed the KW so in fact that one well has a gas power output equivalent to 1000 x 2 MW wind turbines. That rather puts the comparison beyond any doubt.

    0 Like
  • Chilli

    In reply to: Chilli

    Actually, to be fair to wind, the average output of a 2MW turbine would be closer to 0.5MW. So the shale well is 'only' equivalent to 500 turbines. ( Sry - brain malfunctioning today )

    0 Like
  • Sorry Chilli but for a fair comparison you also need to factor in the efficiency of the power generation from gas. <br />I think the latest kit can hit 50% or more so the well is equivalent to around 250 turbines. As you say, that is still mighty impressive, especially since it would be available virtually 24/7.

    0 Like
  • Peter Beaumont

    In reply to: Mike Higton

    I'm a convert, but the numbers you calculate don't mean anything until you remind us how much the well costs. I'm sure the cost looks good.

    0 Like
  • Chilli

    In reply to: Mike Higton

    True if you're using the gas to generate electricity. But you're still not comparing like with like: The gas can easily be stored and used to generate electricity on demand. The output from the wind turbines can't unless you have a massively expensive pumped hydro dam on hand. Also, if the gas is used for heating the efficiency is 80-90%.

    0 Like
  • Mark

    In reply to: Chilli

    Your calculation revision for the load factor of wind went the wrong way<br /><br />If it was 1000 x 2MW turbines, then with a load factor of (say) 25%, it is 4,000 turbines, not 500.<br /><br />As above, gas to power = 50% = 2,000 turbines

    0 Like
  • Roger

    In reply to: Mark

    Wrong<br /><br />21,000,000ft^3 x o.3 KWh/ft^3/24h= 262MW<br />CCGT at 60% = 157MWe continuous output<br /><br />You would need 175 x 3MW modern turbines which would cover an area about 150-200sqkm running at 30% faceplate to produce the same over a year.<br /><br />Of course as highlighted the gas is more useful as it can be used when it is needed

    0 Like
  • chilli

    In reply to: Roger

    onshore turbines are typically 2MW and on average generate 25% of that. So you'd need over 300 such turbines although these could still not be relied upon to match demand since there's absolutely no control over when the wind power is delivered. <br /><br />Also, if the gas is used to generate heat ( eg. domestic heating, or industrial process firing) the efficiency is closer to 80% which would require some 460 x 2MW turbines to ( unreliably) produce the same amount of heat.

    0 Like