|
Northwest Territories casts eye over shale gas
Gary Park For Petroleum News
The Northwest Territories government has taken another tentative step towards joining the shale gas league that is spreading across Canada, although the next phase is “complicated” because of unresolved aboriginal land claims, Industry Minister Bob McLeod said.
But the first systematic attempt to characterize the NWT’s unconventional gas resources is contained in a report by Calgary-based Petrel Robertson Consulting.
Commissioned by the NWT government, the study drew three initial conclusions: Coalbed methane has “little or no potential” in the NWT, while shale gas appears to have significant promise in the southwestern corner of the NWT because of parallels with shale gas reservoirs in the highly prospective Horn River basin of northeastern British Columbia.
The study made no attempt to estimate the resource potential, suggesting that future geoscientific work should focus on characterizing and mapping the potential of the Middle to Upper Devonian shales in the Mackenzie Corridor and southern NWT.
Brad Hayes, president of Petrel Robertson, recommended that a shale gas assessment study should be undertaken to “provide a basis for more targeted data acquisition and mapping work.”
But he cautioned that persuading the industry to spend exploration money on unconventional gas targets in the NWT would be a “significant challenge, considering current market conditions and the distance from facilities and markets.”
“However, comprehensive and well-designed geological work defining a large potential unconventional gas resource and demonstrating that the reservoirs have favorable production characteristics, should attract interest from operators looking to establish a position in a new, high-potential area.”
‘Organic-rich units’ covered The study covered “particularly, organic-rich units,” such as Horn River, Muskwa, Bluefish and Canol.
The unconventional gas potential in the Mackenzie Delta was bypassed because “gas development techniques, particularly dense well spacings, are not considered feasible in this remote and expensive area.”
However, the study noted that the Northwest Territories Geoscience Office had received a number of requests for information about the region’s unconventional gas potential.
McLeod told Petroleum News that the government was partly persuaded to order the scoping study because of the limited drilling in the NWT’s portion of the Western Canada Sedimentary basin, which extends south from the Beaufort Sea, sprawling across most of Alberta and stretching eastward into Saskatchewan and Manitoba.
He noted that no more than 50 wells have been drilled in any one year in the NWT, compared with as many as 17,000 in Alberta “because most producers won’t drill unless there’s a way to get what they find to market.”
McLeod said any thoughts of issuing a call for nominations is impeded because the southern NWT is under land claims negotiations, although the Acho Dene Koe First Nations (a member of the Deh Cho First Nations Tribal Council) “has been quite aggressive in the past to have nominations because they have seen the benefits from exploration.”
That included the short-lived flurry of exploration, significant finds and production from the Fort Liard area.
“The Acho Dene Koe are moving like gang-busters, but land claims negotiations take some time,” McLeod said. “We need all parties to be in agreement before we can put out nominations.”
South to north sugested Others have suggested the NWT should consider progressively advancing its gas development from the south towards the Beaufort Sea, rather than tackling the proposed multibillion dollar pipeline from the Mackenzie Delta, but Macleod was unwilling to enter that debate.
Hayes told the Globe and Mail that shale gas could be an opportunity for NWT to development its gas resources in stages, dealing with First Nations one at a time and working towards “the big prize up at the far northern end” of a Mackenzie Valley pipeline.
The Acho Dene Koe website said a framework land, resource and self-government agreement was signed in mid-2008 with the Canadian and NWT governments.
That committed the parties to focus initially on addressing land and resources, before turning to self-government, which could begin no earlier than 10 years after the effective date of a final deal on land and resources.
The last federal call for proposals in the Fort Liard gas play failed to attract any response from E&P companies in October 2006, reflecting an industry reluctance to make any commitments pending a land claims pact.
Rob Spitzer, vice president of exploration with Apache Canada, told the Globe and Mail that “there’s all sorts of uncertainty” in the southern NWT, indicating that until a regime is in place the industry will remain on the sidelines.
| 