Low natural gas prices and growing production from shale formations outside Alberta have prompted some to question the future of conventional gas reserves in the province.
Jim Bertram remains optimistic.
“There’s an awful lot of gas under the ground — and oil — in this area,” said the president and CEO of Keyera Facilities Income Fund during a visit to his company’s Rimbey Gas Plant on Thursday.
Bertram said technologies like horizontal drilling and multi-stage fracing — practices that have unlocked massive shell gas reserves — can also be used to increase production here.
“We’ve got a lot of what I call conventional tight rock in Alberta, especially west of the fifth meridian, and that geology is absolutely going to benefit from the technology that was developed on some of the shale plays.”
The result will be wells that are economical at lower gas prices than is the case with traditional vertical drilling, he said.
“Industry has and they will continue to take their lumps for the next six to 10 months, but I think we still have an awful lot of gas to pump from underground in this province.”
Bertram has company. Alberta Energy Minister Mel Knight, who was also at the Rimbey Gas Plant, has an upbeat outlook for the industry as well.
“I just think that we are so, so far from the end of this business, that there’ll be many, many more long-term careers in Alberta,” said Knight.
Bertram commented on Bonavista Energy Trust’s recent purchase of 492,000 acres west of Red Deer from EnCana Corp. for $694 million.
“They’ve already identified, I think, 150 or 160 horizontal well locations in one formation, and there are dozens of formations here.”
Keyera’s belief in the long-term sustainability of the natural gas industry in Central Alberta is reflected in the improvements it’s made to the Rimbey Gas Plant, said Bertram. These include the installation of ethane extraction equipment that went into production in August.
“We’ve invested, probably close to $100 million out here over the last 10 years,” he said. “That’s because we believe it’s going to be here for the next 20 to 30 years.”
hrichards@www.reddeeradvocate.com