Western Canadian Natural Gas Production Forecast to 2040

December 03, 2025

Growth despite current market access constraints

Western Canadian natural gas production is currently constrained by limited market access, which depresses gas prices and producer returns. The main limitation to production growth is the lack of access to markets priced at levels sufficient for producers to recover breakeven costs and earn a return on investment.

Despite these constraints, Western Canadian natural gas production is forecast to grow as new gas is required for West Coast Canada LNG projects, increased demand in the Alberta oil sands and greater use in power generation. Incorrys’ Western Canadian natural gas production forecast shows dry gas volumes rising from almost 18 Bcf/d in 2023 to over 25 Bcf/d by 2032 as new tight and shale gas production is brought onstream. After 2032, production is expected to remain relatively flat over the remainder of the forecast period.

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Main findings

WCSB natural gas production faces no physical constraints over the forecast period. Therefore, production can grow to meet new LNG exports, support increased oil sands production and supply additional gas-fired power generation.

First, Montney BC South is the fastest-growing play in Western Canada. This area holds significant low-cost resources due to high well productivity. As a result, production in Montney BC South will reach about 8.5 Bcf/d in 2040, up from 3.5 Bcf/d in 2023.

Second, Montney BC North also grows steadily, reaching about 5.8 Bcf/d in 2040, up from 3.5 Bcf/d in 2023. Together, Montney BC South and North will account for almost 60% of total dry natural gas production in Western Canada.

However, associated natural gas production grows only slowly, from 1.9 Bcf/d in 2023 to 2.1 Bcf/d in 2028, before declining to about 1.4 Bcf/d in 2040. In particular, associated gas comes primarily from oil plays such as Clearwater, Cardium, Duvernay and Montney.

Finally, the “Other” category consists primarily of higher-cost conventional and coalbed methane (CBM) production throughout Alberta. Key areas include the Foothills, Southeastern Alberta, East Central Alberta, Central Alberta, Northeastern Alberta and Northwestern Alberta, as well as fields in Saskatchewan. It also includes production from British Columbia plays other than Montney, such as Horn River and Liard. Incorrys does not expect significant new drilling in these areas as existing production declines.

Overall, Western Canadian natural gas production potential is immense and, over the forecast period, demand rather than supply will set the limit. This low-cost resource base can easily meet additional LNG export demand and power generation to fuel the growing AI sector, provided government net-zero policies change.