B.C.’s election a boon for natural gas producers, but oversupply threatens their riches

By the Editorial Team · Tuesday, October 27, 2026

The newly elected BC Conservative government has committed to tripling liquefied natural gas exports by 2035, aiming to boost production through regulatory reforms and faster permitting. This policy shift, combined with major acquisitions and expansions by producers like Ovintiv and Shell, signals a strategic pivot toward developing the Montney region’s vast natural gas reserves despite current market oversupply challenges.

The recent provincial election in British Columbia has created new opportunities for natural gas producers in Western Canada, particularly in the Montney region spanning Northern B.C. and Alberta. Lorne Doerkson, the premier-designate of the newly formed BC Conservative government, has pledged to significantly increase liquefied natural gas (LNG) exports, with aims to triple output by 2035 under his “B.C. Energy Superpower Plan.” This strategy emphasizes cutting regulatory red tape and accelerating permitting processes, signaling strong governmental support for expanding the LNG sector.

Despite this promising outlook, industry experts caution that substantial growth in LNG exports remains several years away. Currently, the natural gas market in Western Canada faces a considerable oversupply, leading to depressed local prices measured at the AECO trading hub in Alberta. The AECO price is currently around US$1.40 per million BTU, roughly half that of the U.S. Gulf Coast price and well below global benchmarks. This imbalance stems largely from limited export infrastructure, which restricts access to international markets. Producers risk exacerbating this oversupply if they increase production prematurely, potentially squeezing their profit margins and deterring investment.

Major producers such as Calgary-based Tourmaline Oil Corp. and Denver-based Ovintiv Inc. have adapted their strategies accordingly. Ovintiv, previously known as Encana, recently acquired Logan Energy for $890 million, marking its fourth asset purchase in the Montney region over recent years. These acquisitions build on earlier purchases including NuVista Energy Corp. and assets from Paramount Resources Ltd. and Advantage Energy Ltd. The Montney has gained prominence due to its substantial reserves, high-quality wells, and the presence of valuable byproduct liquids such as condensate, which commands a premium global price and serves as a key diluent in heavy oil transport.

Ovintiv’s CEO Brendan McCracken emphasized the Montney’s potential to deliver strong returns and highlighted the strategic importance of condensate in the company’s portfolio. While acknowledging that expanded LNG exports will take time to develop, McCracken noted that Ovintiv successfully sells approximately 80 percent of its Montney production to a broad and diversified customer base, reducing its dependence on AECO prices. The renewed focus on the Montney region reflects a broader industry pivot back to Canadian natural gas assets following years of investment in U.S. shale.

This renewed Canadian interest is supported by recent developments such as Shell Canada’s approval of a second phase expansion at its LNG facility in Kitimat, B.C., which aims to double capacity. Shell also recently acquired Arc Resources Ltd. for $19 billion, increasing its Montney reserves to supply the Kitimat plant. Industry analysts emphasize the appeal of Montney assets not only because of their relatively low acquisition costs compared to the Permian Basin but also due to large numbers of undrilled locations and significant remaining reserves, with less than 10 percent of the resource base developed to date.

As provincial policies become more favorable, companies appear ready to expand their natural gas operations in Western Canada, balancing near-term market challenges against long-term growth prospects tied to LNG export expansion.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.