The Abu Dhabi National Energy Company (Taqa) has snapped up a position in Canada's hottest gas development prospect, buying some of the last available government leases for the area. The company has spent C$65 million (Dh205.5m) for the rights to produce gas from 10,000 hectares of land in a remote corner of British Columbia, the most western Canadian province. The land is located on a sparsely forested northern plain in the shadow of the Rocky Mountains that is believed to contain as much as 250 trillion cubic feet of gas trapped in shale beds. Of that, about 50 trillion cu ft is recoverable with current technology. Taqa's share of the Horn River prospect, which has sparked a land rush among North America's top gas producers, could contain more than 1.2 trillion cu ft of recoverable gas - roughly a six-month supply for the whole of Canada, a country with a population of about 30 million people. "It was the last land available in the Horn River basin. As far as we understand, there is no more land for sale in the basin unless we are buying from another company," said a spokesman for Taqa North, the Canadian unit of Taqa. Despite a slump in North American gas prices, producers have flocked to the British Columbia shale basin, spending C$178m last month alone for land rights in a provincial government sale. They have spent C$1.3 billion in a series of auctions over the past six years. The Horn River gas shale deposit was discovered in 2003 by EnCana, the biggest Canadian gas producer. The company has the biggest land position and drilling programme in the area, and has a 25 per cent stake in a project to build a gas processing plant for Horn River gas, scheduled for start-up in 2011. Some big US producers have also bought up acreage in the region, including ExxonMobil, Apache and Devon Energy. Canada is the biggest exporter of oil and gas to the US, supplying more than 15 per cent of the country's gas consumption. Shale gas is more difficult and costly to produce than gas from "conventional" deposits in rocks such as sandstone and limestone. That is because it is trapped in microscopic pockets in organic material jammed between mineral layers, leaving the gas with little room to flow. Getting the gas out of the ground at a reasonable cost has only recently become possible due to advances in drilling technology and a rock-fracturing process that creates underground channels for the gas to flow through. Taqa, one of three government-controlled Abu Dhabi firms charged with investing in energy projects overseas, had previously spent about US$5bn (Dh18.35bn) acquiring oil and gas assets in western Canada. But this is the company's first shale-gas venture. "Why do we want to get into the Horn River? It has great prospective for production and reserves. It's one of the best shale gas basins in North America, and it's just in our backyard," said Fred Lesage, the managing director of Taqa North, which has its headquarters in Calgary, a western Canadian city that serves as the nation's oil capital. Mr Lesage expects the company to develop technological expertise as it exploits Horn River's reserves, allowing it to use the project as a springboard into other promising North American shale-gas plays. Canada and the US have huge shale-gas deposits that are easy to access because they are close to the surface. In some cases, they are also conveniently close to major cities. Gas shales hold great promise for the future, as the North American economy improves and gas supplies tighten. However, the development of just two US shale-gas basins, the Barnett shale in Texas and the Haynesville in Louisiana, has for now caused a continental glut of the fuel. The unexpected rise in US gas production since 2007, followed by a fall in demand due to the recession, has led to a 70 per cent drop in North American gas prices compared with last summer's peak. Yesterday's gas price of about $3.60 per million British thermal units at the biggest US trading hub was about half the estimated cost of extracting gas from shale deposits. But for companies with long investment horizons, that has created a buying opportunity. Peter Barker-Homek, the chief executive of Taqa, has said the company planned to build an integrated North American energy business, with investments in power plants and facilities for processing, storing and transporting gas, in addition to oil and gas production. tcarlisle@thenational.ae