• 4 minutes Natural gas is crushing wind and solar power
  • 7 minutes OPEC and Russia could discuss emergency cuts
  • 10 minutes Peak Shale Will Send Oil Prices Sky High
  • 13 minutes Don't sneeze. Coronavirus is a threat to oil markets and global economies
  • 1 min On Venezuela
  • 6 mins "Criticism of migration will become a criminal offense.  And media outlets that give room to criticism of migration, can be shut down." - EU Official to the Media.
  • 1 hour CCP holding back virus data . . . . . . Spanish Flu 1918 MUTATED, Came back in 3 waves, Lasted 14 months and killed upward 5% World population
  • 19 hours Cheap natural gas is making it very hard to go green
  • 24 hours Oil and gas producers fire back at Democratic presidential candidates.
  • 6 hours WTI are we seeing the perfect storm
  • 7 mins Engineering, Politics and Political Correctness from Down Under
  • 10 hours I Love Hills
  • 1 day Saudi Aramco launches largest shale gas development outside U.S.
  • 23 hours Investments worthy in versatile and clean natural gas
Alt Text

Shale Gas Drillers Are Facing A Perfect Storm

Very low prices, high output,…

Alt Text

Aramco To Invest $110 Billion In Huge Gas Field

Aramco plans to invest $110…

Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Premium Content

The Great Divide of Natural Gas

South Korea is coming to northeast British Columbia.

It was reported this week that state-run Korea Gas has signed a deal with Canadian gas major EnCana covering three fields in the province of British Columbia. Korea Gas will take a 50% interest, for a price tag of $1.1 billion.

Details are scant. EnCana itself has not commented. But the deal almost certainly focuses on gas from the Horn River Basin/Montney shale play.

Major producers have been flocking to northeast B.C. since the initial fracture-stimulated wells were drilled in the Montney a few years back. Deliverability from these wells reportedly runs in the tens of millions of cubic feet per day. Putting the play right up there with top-producing shales in the U.S.

The issue for the Horn River area is infrastructure. The terrain is remote, hilly, prone to landslides and a long-haul from major gas markets.

Bringing in a deep-pocketed partner like Korea Gas to pay some of the big up-front costs for infrastructure is a win for EnCana (and the entire region, as producers will likely be able to piggy-back off each other's pipeline networks to bring costs down).

But the most interesting implication of the deal is where the gas will be headed. Previously, it was assumed that Horn River production would be hooked into Alberta gas infrastructure (there's a lot of Alberta production just across the provincial border in the Grande Prairie area), and then sent south to Chicago hubs.

But Korea is not buying into this play to sell gas to America. Korea Gas has an official mandate from Seoul to secure energy supplies for Korean domestic use.

The Koreans will almost certainly push to send the gas westward. To the British Columbia Pacific coast. Where it can be turned into LNG and shipped home.

There are already plans to build western Canada's first LNG plant at Kitimat. Having the Koreans in the Horn River play should cement demand for the 750 million cubic feet per day of capacity planned for this facility. It may even speed the development of additional LNG plants.

This is symptomatic of the global shift in energy deployment brought about by shale gas. Up until a few years ago, it was assumed America would be the world's premier gas market. But with shale now producing beyond expectations, it looks as if North America could become a major gas exporter. Adding an unexpected source of supply to global LNG markets.

Just like the Great Divide changes the direction of flow for waterways, shale is changing the flow for North American gas. We always thought western Canada's gas would head east to the Great Lakes. Now it may be headed west to Asia.

By. Dave Forest of Notela Resources




Download The Free Oilprice App Today

Back to homepage




Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News