CALGARY, Alberta (April 9, 2025) — Enverus Intelligence® Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS company that leverages Generative AI across its solutions, is releasing a report looking at the impact of increased oil sands production on in-basin demand for condensate, a liquid hydrocarbon used to dilute bitumen for transportation by pipelines. The report examines the effects on AECO hub gas pricing, the Canadian benchmark price for natural gas, from what is expected to be exceptional levels of condensate-directed Montney drilling in the coming years.
“We see good and bad news for Canadian gas producers trying to capitalize on increased oil sands production over the next four years,” said Trevor Rix, a director at EIR and lead author of the new report. “The good news is that prices for condensate — produced by many operators alongside natural gas volumes — will likely be quite robust. The bad news for dry gas producers is that a pivot toward condensate-directed drilling risks flooding the natural gas market with an oversupply of cheap gas.”
“Investors should look at companies with exposure to liquids-rich areas of the prolific Montney play in Alberta and B.C, the largest source of gas in Canada, as well as select midstreamers, the companies that gather and process the gas and liquids,” Rix said.
Key takeaways from the report:
- EIR estimates that non-upgraded Canadian oil sands production will rise by around 100 Mbbl/d annually until 2028. This will result in substantial demand growth for in-basin condensate volumes because of increased need for diluent.
- Due to insufficient growth within the highest-yielding condensate regions of the Montney gas play in B.C. and Alberta, a supply gap will become apparent over the next couple of years.
- To fill the gap, Montney E&Ps will pursue condensate growth within the context of their asset portfolios, which will likely bring on quantities of associated gas that will strain the Canadian market and pressure prices at the AECO hub.
EIR’s analysis pulls from a variety of products including Enverus Forecast Analytics and Enverus Foundations®.
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About Enverus Intelligence® Research
Enverus Intelligence® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations and macro-economic forecasts; and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. Enverus is the most trusted, energy-dedicated SaaS company, with a platform built to create value from generative AI, offering real-time access to analytics, insights and benchmark cost and revenue data sourced from our partnerships to 95% of U.S. energy producers, and more than 40,000 suppliers. Learn more at Enverus.com.
