Montney Faces Liquids Scarcity as Gas Supply Expands
Enverus Intelligence® Research (EIR) has released a series of reports analyzing key North American oil and gas basins, with a focus on the Montney region. The research reveals a growing imbalance within the Montney, where gas resources remain abundant, but high-liquids inventory is scarcer and depleting faster. High-liquids regions are estimated to hold about 30 years of inventory at current drilling rates, compared to approximately 90 years in lean-gas regions. EIR notes that Montney condensate rate growth has stalled since 2024, indicating that many of the highest-quality ultrarich locations have already been developed.
The scarcity of high-liquids inventory has driven recent mergers and acquisitions (M&A) activity, with buyers targeting oil- and condensate-prone fairways. EIR estimates that roughly 25% of economically viable condensate-window inventory changed hands in under 18 months, highlighting the premium placed on liquids-rich positions. The demand for condensate is also expected to rise due to the needs of Canadian heavy oil and bitumen production, which require approximately 30% diluent by volume for pipeline transportation.
Roughly 60%, 70% of new gas production is currently subsidized by substantial revenue associated with liquids, adding low-cost gas supply to Western Canada. EIR expects about 5 Bcf/d of incremental West Coast LNG export capacity over the next decade, with much of that demand potentially met by associated gas generated alongside liquids-driven development rather than new dry-gas projects. The Montney contains an estimated ~350 Tcf of commercially viable gas, providing substantial additional resource depth.
Trevor Rix, a director at EIR, noted that 'The Montney’s inventory story is increasingly defined by the difference between liquids scarcity and gas abundance. High-liquids acreage is being depleted faster, while development of that acreage continues to bring more associated gas into the market.' The analysis underscores the strategic importance of liquids-rich acreage and the potential for Canada to add substantial gas supply without relying heavily on new dry-gas projects.