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.

   

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