CALGARY, Alberta, March 16 (Reuters) - Northwest Canada’s remote Liard Basin is the world’s ninth largest shale gas resource, according to a new assessment released by Canadian regulators on Wednesday, although it may take years to develop given depressed global energy prices.
The basin, mostly situated in British Columbia but also straddling the Yukon and Northwest Territories borders, is estimated to contain 219 trillion cubic feet of marketable, unconventional natural gas.
That makes it the second largest gas resource in Canada behind the Montney formation in British Columbia and Alberta, and among the biggest shale gas plays in the world.
“We thought the resource was going to be big based on its characteristics, it’s so deep and so heavily pressured. But we didn’t think it would be this big,” said Mike Johnson, technical leader of hydrocarbon resources at the National Energy Board, the country’s oil and gas regulator.
The world’s largest shale gas play is the Sichuan Basin in China, with more than 600 trillion cubic feet of marketable, recoverable gas, according to the NEB.
The Liard Basin holds enough gas to supply Canada for more than 68 years, based on 2014 gas consumption levels, said the assessment, which was conducted by the NEB and government agencies from British Columbia, the Yukon and the Northwest Territories.
However, with global energy prices near multi-year lows as a result of a prolonged glut of crude oil, analysts say the economics of developing the shale gas basin are challenging.
“This is great news, it underscores the capacity of this play in Canada, but the real challenge is trying to figure out ways to monetize the resource base,” said Teri Viswanath, managing director of natural gas at PIRA Energy Group.
At present Chevron Corp and Woodside Petroleum are among the major developers of the Liard Basin, with plans to use the gas to supply the proposed Kitimat LNG export facility on Canada’s Pacific coast.
Editing by Tom Brown