Montney Liquids Scarcity Rises as Gas Supply Grows

Enverus Intelligence® Research has released a series of reports examining key North American oil and gas basins, with a focus on the Montney region in Canada. The latest findings highlight a growing imbalance within the Montney: while natural gas resources remain abundant, high-liquids inventory is becoming increasingly scarce and is being depleted faster. EIR estimates that high-liquids regions hold about 30 years of inventory at current drilling rates, compared to approximately 90 years in lean-gas regions.

The report notes that Montney condensate rate growth has stalled since 2024, indicating that many of the highest-quality ultrarich locations have already been developed. This scarcity is driving up the strategic value of condensate-rich acreage, as low-cost associated gas from liquids-driven development continues to add supply to Western Canada. Recent mergers and acquisitions activity within the Montney reflects this trend, with buyers increasingly targeting oil- and condensate-prone fairways.

EIR finds that roughly 25% of economically viable condensate-window inventory changed hands in under 18 months, underscoring the premium being placed on liquids-rich positions. The demand side reinforces this trend, as Canadian heavy oil and bitumen require approximately 30% diluent by volume for pipeline transportation, and the Western Canada Sedimentary Basin is already a structural net importer of condensate. EIR expects oil sands growth to increase the call on domestic diluent supply, with the Montney positioned to provide a significant portion of future condensate growth.

The latest analysis also points to the Duvernay as an increasingly important source of future condensate growth as operators extend liquids-prone acreage there. At the same time, more liquids development means more associated gas. Roughly 60%-70% of upstream drilling capital today targets oil- or liquids-rich reservoirs, a major shift from 2009, when approximately 85% of Canadian gas drilling activity targeted dry-gas accumulations. EIR finds that associated gas from liquids-rich development has become a structural source of low-cost supply and a key factor weighing on AECO prices.