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According to initial reports, the find contains enough gas to match Canada’s entire current output for nearly a decade. Petroleum Services Association of Canada President and CEO Mark Salkeld says that gas isn’t needed right now, but will be beneficial on a long-term basis.

“We don’t need it domestically. The reserves are full, we’re selling what we can to the U.S.,” he says. “Work on it, develop it, and then maybe they’re ready to start producing it by the time LNG trains are built.”

Apache is one of the partners to build the Kitimat LNG export facility, along with EOG Resources and Encana. Salkeld says Apache should explore the area and identify what they’ve got right now, and focus on developing the infrastructure, which could take years.

Bill Gwozd, vice-president of Calgary consulting company Ziff Group, agrees, and says it doesn’t make sense for Apache to blow the well down, only to sell into the current $2 market. Like Salkeld, he says their efforts need to be focused on Asia, where they’re buying gas at an exponentially higher price.

“This is the type of well that you want to park, put it in the garage, and produce it when you have a liquefier on the west coast, flow the gas, and sell it into a Japanese market where the price of gas just came down yesterday to $17 per Gigajoule MCF,” he explains.

Initial reports are based on a single well from 2009, that produced 21 million cubic feet per day during the first six months after being fracked six times. Gwozd says only six fracks seems low to him, but as Apache is a technically savvy company, he’s sure there’s a logical reason to use less fracks, and says the wellbore may be shorter, suggesting it is a narrow, complex geological formation.

Based on numbers he’s been shown so far, Gwozd says they suggest that if the formation is large enough, just a few wells could fund or supply an amount of gas to feed the liquefier for years to come. However, as LNG is at least 4 to 5 years away, he suggests looking into other unconventional gas demands, like diesel, oil, and ethanol.

“Anybody that can get an oil equivalent price, ie. LNG export or gas to liquid, those are the types of projects to start thinking about for North America versus a traditional house, commercial building, etc.,” he argues. “That’s going to be how the markets will grow in the future, for North America, and that will allow extra surplus gas to be used in these unconventional markets.”

While it will take years, and lots of money, Salkeld believes if Apache plays its cards right, this new gas play could set them up to be big enough to have a part in all of that.

“You start looking at investors and banks; if they’ve got that kind of reserves in the ground, banks are going to be tripping all over themselves to lend them money to grow and develop, there’s no doubt.”

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