CALGARY – British Columbia’s shale gas fields stand to gain as buyers flee landlocked bitumen reserves in neighboring Alberta.

Canada’s westernmost province is likely to see an uptick in “selective” merger and acquisition activity as global liquefied natural gas players seek reserves needed to backstop export developments, Greg Pardy, co-head of global energy research at RBC Dominion Securities Inc., said in May 22 report.

The opposite appears true in Alberta, as pipeline constraints and high production costs dampen enthusiasm for oil sands deals. Marathon Oil Corp. last week abandoned plans to sell portions of its 20% stake in the Athabasca Oil Sands Project, saying it couldn’t reach an agreement with a prospective buyer. Murphy Oil Corp. and ConocoPhillips Co. have also backed away in recent weeks from selling oil sands assets.

“There’s some real questions about whether Alberta is ever going to be able to get any of its energy outside of the province other than into the U.S.,” said Tom Valentine, a partner in the Calgary office of Norton Rose Canada LLP.

Would-be buyers “are now looking at Alberta as a real worrisome investment opportunity, and that’s why I think you’re seeing some of the excitement migrating to the other side of the mountains.”

Shell, San Ramon, Calif.-based Chevron Corp., Britain’s BG Group and Malaysia’s Petronas are among those sizing up export projects on Canada’s West Coast.

B.C.’s Montney shale gas play, which stretches into northwest Alberta, accounts for 15% or more than two billion cubic feet a day of Western Canada’s natural gas production, according to RBC Capital Markets.

The formation attracted more than $12-billion worth of deals last year, RBC said in the report, titled A New Dawn for North American LNG.

Montney-focused deals may pick up this year, the bank said, with at least 340,000 net acres of natural gas-soaked rock currently for sale in the play and up to 6.4 billion cubic feet a day of proposed exports slated to depart from Canada’s West Coast by 2020.

Asian investors, in particular, are “asking us to help them on B.C. deals,” Mr. Valentine said, adding that buyers remain eager. “There’s a desire, I think, to do things this summer rather than this fall.”

Canadian Natural Resources Ltd. and Talisman Energy Inc. are marketing large chunks of their Montney lands. Suncor Energy Inc., Canada’s biggest oil company, opted to hang on to its holdings in the play when it struck a $1-billion deal to sell gas properties in Alberta and Saskatchewan earlier this year.

The hugely expensive LNG projects come with better growth prospects and fewer regulatory headwinds than oil sands investments, said Judith Dwarkin, director of energy research at ITG Inc. in Calgary.

“The political climate is more favorable for LNG development and export” in B.C., she said. “There’s a whole ream of variables you could look at that would suggest that if you have an appetite for these big, complicated projects, LNG may have more attraction at this point” than oil sands.

Alberta gas prices are expected to average between $3.25 and $3.75 per gigajoule this summer, with U.S. gas fetching between US$4 and US$4.50 per million British thermal units, according to a National Energy Board outlook.

The increase, driven by coal-to-gas switching in power generation and a shift toward drilling for oil and petroleum liquids like propane and butane, is providing some relief to gas producers whacked in recent years by slack demand and falling prices.

“We’ve staked ground that ultimately we think we’ll sell to an LNG player,” said Jeff Tonken, president and chief executive of Calgary-based Birchcliff Energy Ltd., which owns a half-million acres of undeveloped land in northwest Alberta.

“In the meantime we’re making money, so we’re not in any rush to do anything.”