May 15, 2025

Western Canadian natural gas production is currently constrained by market access leading to depressed gas prices and producer returns. The limitation to production growth is the lack of access to markets priced at levels sufficient for producers to realize breakeven cost recovery and investment.

Despite market constraints, Western Canadian production is forecast to grow as new gas is required for west coast Canada LNG, increased demand in the Alberta oil sands, and increased use in power generation.

Incorrys is forecasting Western Canadian dry gas production to grow from almost 18 Bcf/d in 2023 to over 25 Bcf/d by 2032 as new gas production from Tight and Shale Gas formations is brought onstream. Production is expected to remain relatively flat over the remainder of the forecast period.

Main findings:

• There are no constraints on WCSB natural gas production to meet demand over the forecast period. Production growth will be required to meet new LNG exports, to support increased oil sands production and for power generation.
• Montney BC South is the fastest growing play in Western Canada reaching 8.5 Bcf/d in 2040, up from 3.5 Bcf/d in 2023. This area has significant resources at low breakeven costs due to high initial productivity of almost 9 MMcf/d.
• Montney BC North also grows steadily from 3.5 Bcf/d in 2023 to 5.8 Bcf/d in 2040.
• Combined, Montney BC South and North will account for almost 60% of total dry natural gas production from Western Canada in 2040.
• Associated natural gas production (a near zero cost by-product of crude oil production) grows slowly from 1.9 Bcf/d in 2023 to 2.1 Bcf/d in 2028 before declining to just 1.4 Bcf/d in 2040. Associated gas comes primarily from oil plays such as Clearwater, Cardium, Duvernay and Montney.
• Alberta Deep Basin grows over 1 Bcf/d during the forecast period from 2.8 Bcf/d in 2023 to 4.0 Bcf/d in 2040.
• Production from other higher cost plays including conventional and Coalbed Methane (CBM) production in Alberta and Saskatchewan and unconventional BC plays including the Horn River and Liard will slowly decline over the forecast period.

Western Canada natural gas production potential is immense, constrained only by demand over the forecast period. This low-cost resource base can easily meet additional LNG export demand and power generation to fuel the growing AI sector, should government net-zero policies change.

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