All right, let's get started. I just want to for those of you that don't know me, my name is Dale Lukach, Manager of Capital Markets here at ARC Resources. Quickly, I just want to sincerely thank everyone for attending, both in the room in person and on the webcast. Also thank everyone back at ARC. There's a lot of people that dedicated a lot of time and resources into getting this pulled together, and I think we did it. I'm just going to quickly walk through the agenda and introduce the leadership team that's presenting today. In my opinion, these are most effective when there's something incremental and informative and done efficiently, and I think we sort of achieved that today, so I'm excited to get this underway.
senior leadership team presenting today, to my right, Terry Anderson, President and CEO; Kris Bibby, Chief Financial Officer; Lara Conrad, Chief Development Officer; Armin Jahangiri, Chief Operating Officer; Ryan Berrett, Senior Vice President, Marketing, and also joining us, Lisa Olsen, Senior Vice President, People and Corporate, and also from our board of directors, Carol Banducci. I will turn it over to Terry Anderson, who will talk about our long-term plan and then give a corporate overview.
Perfect. Thanks, Dale. Good afternoon, everyone, and welcome to ARC's Investor Update. Thank you very much for being here. We appreciate you taking the time out of your busy schedule to come and sit and chat with us for a bit. We're excited to present to you our strategic direction and our 5-year plan going forward here. Before we get into those details, I want to just step back for a minute and talk a little bit about who ARC is and some of the decisions we've made over the last couple of years that really have set the company up for success going forward here. This corporate profile slide is for people that are less familiar with ARC. ARC has been in business coming on 28 years now, and we've always been focused on long-term profitability.
We've paid a dividend since inception. That cumulative paid is CAD 8 billion. That equates to greater than CAD 30 per share, which is pretty significant. Our market cap today is around CAD 10 billion. ARC is the largest Montney producer, with current production of 350,000 BOE a day. We are also the largest condensate producer in Canada, and we're the third-largest natural gas producer, with production of 1.3 BCF a day. 100% of our production comes from the Montney play. Yes, we are a pure-play Montney producer for a reason, because the Montney is one of the most profitable and one of the largest resource plays in North America. We know the Montney better than anyone. I would say we are experts at the Montney. That's a strategic advantage.
How did we get to this scale? Well, we were leaders over 10 years ago to have a vision to transition away from the old conventional assets to the new world-class Montney resource play. We drilled the first horizontal well back in 2005 in the Montney and multi-stage fractured that. This comment's going to date me, but I was part of the technical team that actually drilled and completed that well a short 18 years ago. That really kicked off the Montney boom. Then we started acquiring Montney, large swaths of Montney in the sweet spots. Then two years ago, the final piece of the puzzle was our Kakwa acquisition, and this created these large, concentrated assets that we have today with over greater than 1 million acres of high-quality Montney resource.
The map on the right is a beautiful picture of efficiency. Kris laughs at me when I talk about this slide because I think this is the most amazing slide there is. Maybe it's something to do with the engineer in me, but it's because it speaks to this pursuit of efficiency and profitability. That's what I see when I look at this slide. To help context that, if you think of... To put it into perspective, in 2014, we produced 110,000 BOE a day from 5,700 wellbores, and our production mix was 60% gas and 40% liquids. Today, our production is 350,000 BOE a day from only 1,700 wellbores, and our production mix is still that 60% gas, 40% liquids.
That is what I call improved efficiency and why I love this slide so much. Not sure. Kris is probably still laughing at it, but it's my slide. I like it. We've taken bold actions in the last two years to really set the ARC up for the significant inflection point in our free cash flow per share over the next five years, and we're going to show you that because it is significant. The business combination was transformational for us, and the benefits of that increased scale has positioned the company to control our destiny, pursue new business opportunities like LNG, and deliver significant value to shareholders for decades to come. I want to point out the dividend remains a key component for our for our shareholder return proposition, and we've already increased the dividend to above pre-COVID levels.
Some of the points you see on this slide really sets that solid foundation for the next five years that we'll discuss today. ARC has a proven track record of consistently delivering strong results across all aspects of our business, and we do it quarter-over-quarter, decade-over-decade. Supposed to be year-over-year, then decade-over-decade. It's easier said than done to consistently deliver strong results in this industry. It takes a lot of work and a lot of discipline. What is that secret sauce? This is what differentiates ARC. On this slide, there's a lot of attributes here, but it's not one of these attributes in particular that makes the difference. It's the combination of all of them. World-class assets with scale. You'll hear Lara talk about the depth of our inventory.
This culture of discipline, which is about managing risk while creating value. Operational excellence, well, that is the hallmark of ARC's success, and you'll hear Armin talk more about some of our technical excellence. Always having financial strength. It's important so that you can manage through the cycles, but be able to act on these opportunities like we did two years ago. I would say there are very few companies that have all these attributes and that can consistently deliver strong results year-over-year, but ARC can do that. That's a quick look in the rearview mirror. Now let's look forward to what we've been waiting for here. Our five-year plan delivers significant shareholder value. This is a very disciplined plan that balances capital allocation to maximize returns to shareholders today, but in the future also.
The plan on this page, you'll see, is a three-year cadence between development projects. The first phase of Attachie comes on full stream in 2025, and you can see on the top graph, the dark blue bump, and on the bottom graph, you can see the corresponding bump in free cash flow. Three years later, in 2028, the second phase of Attachie comes on, and that's the gray bump in the production and the corresponding huge bump in free cash flow. The free cash flow per share triples from about $1.60 in 2024 to $4.80 in 2028, which is a CAGR of 24%, which is a result of that growth by investing in Attachie and growing that free cash flow, along with reducing our share count.
We are on the cusp of a significant inflection point in our free cash flow per share growth over the next 5 years. Investors would not appreciate this yet because we have not shown you a 5-year plan, and now we are today. For context, the cumulative free cash flow by 2028 equates to CAD 8 billion or 80% of our current market cap. CAD 8 billion, that's a lot of cash flow that comes back to the shareholders. The plan delivers significant value with a 20% ROACE. The numbers on this page look great to me. They're quite staggering. Hell, this might be my new favorite slide, Kris. Now the hard part is executing and delivering on this, but it's also the exciting part because operational excellence, that's our forte at ARC. We do this, and we've done it many times.
We will deliver on this successfully. The team will provide more details on this, 5-year plan going forward here. As I mentioned, we have greater than 1 million acres of high-quality Montney land. ARC's Montney assets are some of the best from a quality and from a scale perspective. ARC has always been praised for having great Montney assets. Our production mix, as I mentioned today, is 60% gas, 40% liquids. That percentage stays the same. It's constant over the five-year plan that you see here today. We are focused, and that's because we're focused on developing the Attachie liquids. Our asset portfolio that this graph shows has the capability to easily grow to 500,000 BOE a day and remain flat for decades. Like, that's impressive for the size of the company, we are.
We are very fortunate to be in a position to not have to worry about inventory duration or asset quality. That probably will answer the M&A question if anyone has one later. We've always been have a balanced approach to our natural gas marketing across North America, and now we're extending that diversification globally, targeting up to 25% of our production to have exposure to international pricing. Our decades of world-class Montney inventory allows us to pursue global LNG opportunities. Frankly, the world needs more Canadian natural gas energy to address energy security, affordability, reliability, and to lower global emissions. We need to do more as a country. This is an important part of our business diversification strategy to enhance revenue per BOE. This is definitely a differentiator in ARC's value proposition to you. Why invest in ARC?
Here's four key buckets that I just want to touch on. I talked about being disciplined. It's about disciplined growth is the first one. By investing in Attachie development and reducing the share count, our 5-year plan triples free cash flow per share, as I mentioned. Second, the commitment to shareholder return. Today, our long-term debt is around $1 billion, and that's where we want it to be. We plan to return all free cash flow to shareholders through the dividend and share buybacks. We'll continue to pursue a balanced capital allocation strategy to ensure strong shareholder returns today, while investing in our business to grow shareholder returns tomorrow. World-class assets. I talked about the massive scale of greater than 1 million acres of high-quality Montney, which provides decades of inventory runway.
Over a decade ago, we developed a strategy to diversify that in our natural gas marketing across North America at a much lower cost structure than today, which is a strategic advantage for us. The margin expansion. Well, one of the benefits of our scale is our ability to expand margins with global market diversification. The significant scale of our current infrastructure network, that we'll talk more about, allows for lower reinvestment rate going forward, hence more returns to the shareholder. Let's get into the details of this compelling investment case, and I'll turn it over to Kris to walk through our capital allocation strategy to start with.
Thanks, Terry, and welcome, everyone. It's very good to see everyone here today, and we're looking forward to it. As Terry mentioned, I'm gonna walk us through our capital allocation, how we're thinking about it and where we wanna go, and some of the outcomes of it. Really, if you think of it this way, I get to go through my favorite slides. Terry went through his, now it's my turn. It's really how we put the deck together. We all just put our favorite slides in. As ARC's entering its 28th year of operations and of business, we are very proud of our track record of profitability.
You can see on the chart, we've averaged about 13% return on invested capital over that period, and you can see on the right side that it's going to be higher going forward. I'll just touch a little bit on. You know, shortly after the financial crisis in 2008, 2009, 2010, you heard Terry start talking about how we were looking at our profitability, and it was a little lower than we wanted to see it. That was where the opportunity was to then turn and pivot and focus on the Montney. You can see it took a few years, a global. Another, you know, we had COVID. We had all kinds of a price war on both the oil side and then also on the gas side.
It took some time, but we got there, and now we've made the corner, and you can see the increased returns that we have experienced recently and are going forward. It's a great investment opportunity from us. Terry hinted at this as well, and what we're talking about here now is just shifting gears a little bit on how are we going to get the optimal returns to shareholders, and it comes from capital intensity. You can see as we were building out the Montney over the past decade, capital intensity was a bit higher, elevated, obviously, as we're building out facilities, achieving scale, and developing our assets and facilities.
We've turned the corner again, and you can see from basically 2021, roughly 50% of our cash flow will go into the ground, leaving a tremendous amount of free cash flow for those optimal returns that we are talking about. We've got the scale, we've got the decades of inventory, and we've got the business processes in place to develop this going forward, and that's what's going to allow for the superior returns. We like the five-year outlook so much that we thought we'd give you another version of this slide. On this one, just wanna dig in just a little bit on a few things on it. I do wanna remind everyone, and Terry mentioned this as well, this is one scenario. Something that ARC always does is we plan multiple scenarios, and then we go ahead and execute.
We're moving ahead with Attachie Phase I. It'll be on stream, fully in 2025. In this scenario, we have Attachie Phase II coming on in 2028. The organization is continuing to prepare. We can move things around, but we don't have to make that decision today. Really, what that'll give us is some flexibility. It'll depend on the commodity market at the time, as well as a combination of us focusing on this balanced capital allocation approach. You can see capital ranges roughly CAD 1.7 billion-CAD 2 billion per year over that time period. Fluctuates, obviously, as we are investing in growing the production. The production growth on the bottom left, you can see, is quite significant.
As always, ARC always, you know, we always plan for sensitivities and what happens if we go into a low price environment. You can see on the bottom right, it's funded through a very low price environment should we choose to keep going. Obviously, at the higher prices, it just generates that much more free cash flow. Free funds flow per share. This is a really powerful slide, and I just wanna zoom in a little bit. You know, the growth in this is a combination of effects. It's both comes from growing the profits of our business by investing in our base assets, Attachie Phase I and Attachie Phase II, as well as the retiring shares. When we look out at current valuations, we would continue to retire a tremendous amount of shares, which is really compounding this growth.
You heard Terry mention, you know, growing from $2 roughly this year, well up above four and approaching five in 2028 on a flat deck. We're not messing around with price to create this. We're very confident this will be base underlying growth. Now the fun part is really what are we going to do with this free funds flow? The free funds flow allocation that we're looking at over the next several years, you can see is excess free funds flow available. We're going to hold our base dividend payout ratio in that 15% range, and that will allow us with a tremendous amount of excess, where currently we are retiring a lot of shares given the valuation disconnect relative to how we view intrinsic value. This part's a fun slide.
It's a bit illustrative, which it always has to be when you're forecasting forward quite a bit. What we're trying to show here is really just the power of the combining effects of investing at a reasonable pace, retiring shares, and paying out our dividend. You can see the compounding effects on the dividend going up into the right, holding that payout ratio in that 15% range. The line coming down is our share count. As you know, we issued about 350 million shares when we acquired Seven Generations in 2021. You can see it coming down to the right, essentially getting back down to our pre-business combination levels by the end of this period, and the balance sheet stays the same.
It's really just the compounding effects of how we are investing in our business on that balanced capital allocation. I'm gonna end here before I hand it off and just to remind everything. Our principles haven't changed. We're a balance sheet-first organization. The balance sheet is exactly where we want it. We've got our CAD 1 billion of long-term debt outstanding in our investment-grade notes at sub 3%, and we think that's the appropriate amount of leverage on this balance sheet. We do have tremendous excess liquidity and access to capital via our banking group, but that's really. It's more, it's flexibility for us, is what it is.
Balance sheet first, the balance sheet is exactly where we want it, which allows us to essentially pay out all free funds flow via the dividend and via share buybacks, which is really what the compelling case for this is going to be. With that, I'm going to hand it over to Lara and Armin to walk through what you're really here for, and that's all the exciting development plans we have.
Thanks, Kris, good afternoon, everyone. Armin and I have the pleasure of walking you through ARC's asset base. As you've already heard from Terry and Kris, we're very proud of our asset base, kind of fun to get to walk through it today. We are incredibly well-positioned, as all of our production, as Terry said, comes from the Montney. It truly is an amazing resource. We love the Montney for how efficient it is. You know, with the over 300 feet of thickness in the Montney, we're able to go in and do multilayer development and have a significant resource per section. This really does create amazing development opportunities for us. Not only do we love the Montney itself, we're also very proud of the position we have in the Montney.
Our lands are predominantly in the higher pressured areas of the Montney, so most are in the overpressured, and that gives us high deliverability. With that, we also have contiguous lands, which really does allow for that efficiency that Terry spoke to. With that, we have decades of top-tier, low-cost inventory, which delivers some of the best economics in the basin. We realized the quality of the Montney very early on, and that is what has positioned ARC so well. We were able to enter in at low cost. When you look at from 2000 to 2010, we were accumulating our asset base. As Terry mentioned, yeah, he has the bragging rights on drilling that first horizontal well in the Montney.
What that did was not only get bragging rights but also allow us to go in and really capture a lot of mineral rights across the Montney, identify some of the highest value areas in the play. By being such an early mover, that's how we got such a great, consolidated, efficient position in some of those best spots. We've been in the development mode effectively since 2010, organically growing ARC's Montney production from basically zero to the 160,000 BOEs a day in a decade. We built this cash flow base through sustainable long-term development, and what we mean by that is we built our own facilities, duly connecting them where possible.
We always make sure we have at least 10 years of inventory before we invest in infrastructure so that we know we have that sustainable investment and can maximize our returns. Of course, we made the countercyclical acquisition of Seven Generations in 2021, which effectively doubled our production base. When we come to Attachie Phase I and bring that on stream, it will be our eighth major facility project that we've constructed in the Montney. I'll hand over to Armin now to speak in more detail about our infrastructure and operational performance.
Thanks, Lara. Good afternoon, everyone. As Terry mentioned, we are extremely proud of our operational excellence, so I want to spend the next three slides to show how as ARC, we continue to deliver best-in-class and low-cost production. Let's just start by discussing the benefits of ARC's owned and operated infrastructure. As you can see on this map, we own a large network of plants across our asset base. This network gives ARC the ability to handle about 1.5 BCF a day of natural gas and 135,000 barrels of condensate or liquid handling capacity. We see multiple benefits from owning this infrastructure. The first benefit is the operational flexibility.
As an operator of these facilities, we are able to optimize our production based on market conditions, which is the work that happens pretty much, frequently between our operations and marketing teams. That work over the years has resulted in generating millions of dollars of value for our shareholders.
Owning the infrastructure also gives us the opportunity to remain very nimble and react very quickly to the operational challenges. An example of that would be the wildfire situation in Alberta and BC, in which we were able to basically divert our production and minimize that risk on ARC's operations. Finally, in terms of operating costs, we estimate that ARC is saving about CAD 300 million per year simply by avoiding paying third-party processing fees. We are also very focused on reducing our capital cost. There are three things that we do to improve our cost structure. Number one is getting the lowest cost for our material and services. We have a dedicated procurement team that are very effective in leveraging ARC's size and scale, and our level-loaded activity to secure best possible pricing for us.
Design optimization is the second and perhaps the most effective way of improving capital efficiency. We have technical teams who are dedicated in optimizing our drilling completions and facilities design. They are responsible to find that optimal capital efficiency, which is the right balance between capital and production. We will share a few of those examples as we go through the presentation. Finally, we put a lot of focus on delivering the most efficient execution in the field. Our teams have specific KPIs that they use to measure and benchmark ARC's performance against our peers. This slide shows a couple of metrics that our completion and drilling teams use for their benchmarking exercise.
In terms of completions, as you can see, the top two graphs, we outperform on our peers in terms of tonnage of sand pumped per day, as well as the wellbore length that we complete every day. On the drilling front, our rigs continue to outperform our peers in terms of meters drilled per day. This next slide is the same exact drilling and completions metrics as we saw on the previous slide, but this time it's for Kakwa operations. Again, as you can see here, the comparison to our peers' data show that ARC is delivering top quartile performance, both on completions and drilling front. Our the eight rigs that we have that has been drilling for ARC in Kakwa since 2021 are delivering performances that is exceeding every other peer company that is operating in the region.
With that, let's pass it back to Lara.
Armin just spoke to ARC's... Sorry, with a little dance here. ARC's strong track record. Looking forward, we also have a strong position moving forward, and that's really to do with the substantial inventory that we have ahead of us. Terry already spoke to how proud he is of this inventory and how we really do feel this sets us apart. In the light blue are the wells that are booked as reserve locations, verified by our third-party independent qualified reserves evaluator. In the dark blue are the inventory locations that are additional, and those will be booked as we develop the assets. When you look at it, for each of our producing assets at Kakwa, Dawson, Ante Creek and Sunrise, we have anywhere from 10 to 20 years of inventory to maintain those assets at their current production levels.
Additional to this, we have significant inventory at Attachie, at Septimus, and at Sundown that will provide growth options for our future. Kakwa is a high-quality asset with inventory to sustain the current production rate for 15 years. I think sometimes the scale of Kakwa has been underestimated or not fully recognized. When you think about it, we're producing 180,000 BOEs a day right now, and we've only developed 45% of the land base. With that other 55% that's left to be developed, we can sustain this asset at its current run rate for an additional 15 years. This is longer than I think we had originally estimated, too, and that's because we've now included the lands to the west of the Cutbank Once we get our hands on an asset, we like to spend the time to optimize it. We now have the full development plan for those lands west of the Cutbank
From that, you know, not only do we get great cash flows, those wells I know are often featured on the highest productivity wells in Alberta, on the top Montney Well reports, you know, we really see the strength of their deliverability through those. We also get value from these wells as far as the learnings that they deliver. We integrate that into how to best optimize our development go forward. We have the ability to predict our performance. I know a couple people spoke to some of their favorite slides. I think I'm kind of getting into one of mine, and it's really because I get to geek out a little bit about some of the great work that the team has underway.
I'm showing 2 recent examples here of where we've improved performance. We're gonna keep applying these performance improvements to the next phases of development. On the left-hand chart are the results of widening the inter-well spacing from 135 m to 175 m. Anyone familiar with the ARC story knows that this is something we undertook quite some time ago, basically upon acquisition of Seven Generations. It's a design progression that we evaluated in that acquisition. We implemented right away, and we've now seen very strong results from it. Productivity has increased by 18%. As a result, we need less wells to sustain our production and therefore have lowered the sustaining capital for Kakwa. More recently, the Kakwa asset team identified the opportunity to develop both the upper Montney and the middle Montney as a single-layer development.
We're aware that the wells talk to each other, and they're not really fully separate layers, and what we were seeing is that we had better drilling performance and better frack initiation when we landed the wells in the middle Montney. What I'm showing you here is a middle Montney-only example. Not only did we know that we had better operational efficiencies, and as I said, better completion initiations, but we also had diagnostic work that indicated that the frack geometry that was created in the middle Montney accessed the full reservoir and effectively was draining both the upper and the lower Montney. This is now proved out. We have a 7% increase in production from drilling exactly the same number of wells, but landing them all in that middle Montney.
On top of that, we've seen 10% improvement in our costs because we're able to drill the wells faster and initiate the fracs better. With that, the resulting capital efficiency has been improved by 20%. Super pleased with the results of the team, so I'm gonna call this one as my favorite slide to get to brag up their results. Now moving over to ARC's Northeast BC assets, we come to Dawson, which I always love to speak about because it really is such an amazing asset. As both Armin and I showed earlier, we've had four phases of infrastructure development at Dawson and have processing capacity of 300 million a day that's fully owned and operated by ARC. This high-quality reservoir has produced over 1 TCF of gas to date. It achieved that milestone in 2022.
Despite this remarkable achievement, we only have developed about one-third of the land base. Again, similar to Kakwa, we have huge amount of inventory ahead of us. We've had recent base well performance exceed our expectations, which has allowed us to reduce our capital budget for 2023. We also have very strong half-cycle economics. The payouts at Dawson are right around 1 year, and with that, we end up with a excellent business that delivers free funds flow at a very low reinvestment rate of just 38%. Sunrise is ARC's producing dry gas asset that's interconnected to Coastal GasLink pipeline, ready to take gas to Canada's west coast for LNG. This is a highly efficient land base also, and that's really to do with the stacked development layers at Sunrise.
We only have 35 sections of land at Sunrise. Yet we can hold production flat at 365 million a day for 20 years. As we often speak to, Sunrise is an incredibly low-cost asset. The F&D for Sunrise is about CAD 0.50 per Mcf, the OpEx is about CAD 0.25, sorry, per Mcf, and the transport costs are CAD 0.35. All in, CAD 1.10 per Mcf. Of course, on top of this, we'd have to look at royalties. Royalties are price sensitive in BC. You can really see how wonderfully resilient Sunrise is. The Sunrise facility is also fully electrified, powered off the BC grid, thereby providing low emissions production. With the long life, the low cost, and the low emissions of Sunrise, it really does make it ideal as a West Coast LNG supply.
On similar geological strike as Sunrise, we have Septimus and Sundown, both of which will provide strong gas development opportunities for our future. We have the full development plan in place at Septimus. I know this isn't one we've talked about a lot, but that asset is ready to go. So we can sanction that when we decide the timing is right from a capital allocation perspective. We have 17 TCF of gas in place at Septimus and Sundown combined. Again, the resource is well positioned to feed LNG as we can develop these assets, similar to Sunrise, with that low cost, low emissions profile. Our aim here is to produce about 1 BCF of gas for 15 years, really providing that longevity for backing long-term supply contracts.
Ryan's going to speak to more on to our philosophy on those supply contracts in a few minutes. With that, I'm going to jump into Attachie, which of course, is what we're all really excited about. We've now gone forward with sanctioning our first phase of development, and as Armin will talk to in a moment, activity is well underway. Attachie really is ready for that large-scale multilayer development. We have over 1,500 future drilling locations identified that we're very excited to be moving forward with. ARC's lands at Attachie cover over 300 net sections or 200,000 contiguous eight net acres of 100% owned land. This consolidated land base allows us to do what we do best from development and operational efficiencies.
We have a full field development in plan in place, which includes the wells, the drill pads, the facilities, the pipelines, and the water infrastructure. Having such a large block of land really does allow us to plan out our development in a highly efficient manner. We'll also have dual connectivity for ARC's gas, which allows operational flexibility. I think the excitement we have internally, you know, it was almost palpable in the office as we sanctioned Attachie. I think that excitement really comes from the fact that this is just the first phase of development at Attachie. We have plans underway for an additional four phases of development, given the scale of this asset. With that, I'll pass back to Armin to talk a bit more about the facility design.
Thanks, Lara. As Lara mentioned, the work has already started in the field. I wanted to spend a few minutes and provide a high-level overview of the execution plan for this project. As you know, we have estimated to spend about CAD 740 million of capital to build all the associated infrastructure and to drill and complete the initial wells that is needed or required to field the plant. As part of this overarching Phase I project, we will be building a 90 million a day gas processing facility, as well as executing approximately 200 kilometers of gathering infrastructure and pipeline that gathers our production in the field and also allows us to flow to the sales points.
We are also building a water recycling facility that will provide water for our frack operations. In addition to that, we are building a network of transmission and distribution lines, power lines, that will fully electrify Attachie. A very large-scale project. The plan is to execute all of these projects in 18 months, with the expectation to reach full production capacity early 2025. It is important to highlight that CAD 65 million of that CAD 740 million is expected to be invested on infrastructure that will support subsequent phases of Attachie. It is also important to note that we've been working very closely with First Nations over the last five years to optimize the plan and minimize surface disturbance. Because of that collaboration, we've been in a position to sanction this project today.
A lot of work has gone into planning this project, and we believe, we are set up to deliver one of the most efficient projects that ARC has to deliver.
Just finishing off on Attachie, you know, when we look at it, not only do we have a facility and infrastructure plan that's ready to go and completely underway, but we're also equally convicted in the well performance that we have at Attachie. Rarely do we end up having over two years of production data from a development pad prior to sanctioning a project. For Attachie, we have exactly that, and it really is a bit of an engineer's dream to have that much data to build your long-term plans off of. You can see here the overlay of our type curves to that data, as well as an overlay of the Kakwa type curve. All data has been normalized to 2,700 meters horizontal well length. You can see the similarity in the deliverability of the two assets, Kakwa and Attachie.
Having said that, the subsurface characteristics of these two reservoirs really do differ quite a bit. The pressure grading at Kakwa ranges from 10-14 kPa/m, whereas at Attachie, it's slightly higher, ranging from 12-16 kPa/m. The true vertical depth, or TVD, of Kakwa is between 2,600 and 3,500 meters, whereas at Attachie, we're actually just under 2,000 meters. The net pay and porosity of these two reservoirs are fairly similar, but the permeability at Kakwa is really much better than at Attachie. Although Attachie and Kakwa are comparable, when you look at the condensate gas ratios or CGRs, the different subsurface characteristics of the two reservoirs require us to employ different development designs to capture the resource efficiently.
We're spacing our wells at Kakwa at 175 meters, as I spoke to earlier, whereas at Attachie, the inter-well spacing of our wells will be 300 meters. With that wider inter-well spacing, We'll have a higher tonnage intensity at Attachie, allowing us to access the reservoir. The resultant reserves per well, and the F&Ds are actually gonna be quite similar between these two investments. Overall, we have a really strong liquids play at Attachie, with a CGR relationship that's very similar to that at Kakwa. Although the reservoirs and the pressure regimes are different, we've used our development planning knowledge to normalize and deliver very similar economics.
The combined effect of a well-thought-out development plan at Attachie, strong well performance, efficient operations, and taking the learnings from all of our other operations and assets across northeast BC and into Kakwa, allows us to deliver very strong free funds flow for shareholders. Investing in Attachie will deliver CAD 500 million of netback of annual funds flow in 2025 go forward, which will be sustained for a decade+ due to that very strong inventory. This is due to a combination, of course, of having both gas and high-value condensate production. Overall, between Armin and I, we did not speak to all of ARC's assets in detail. We do have two other core assets in ARC's portfolio, those being Parkland, which is part of the greater Dawson area, and Ante Creek in Alberta.
Each of these play an important role in our portfolio. We think of each of our assets as being a standalone business that needs to deliver free funds flow back to the corporation. Each asset is doing exactly that, with the inventory to sustain that free funds flow for the next 10-20 years. We're gonna continue to focus on profitability as our core mandate, and what that really means for the development operations teams is focusing in on capital efficiency. We've taken big steps, as we've shown you today, on improving that capital efficiency, and we're gonna continue to focus on that go forward. With that, I'd like to hand over to Ryan to provide an overview of our marketing and LNG strategy.
Thanks, Lara. Good afternoon, everybody. Great to see everybody. Really excited today to talk about our marketing strategy. You know, over the past years, thinking back on it, as our company has grown, our marketing strategy has evolved. Really pleased to say, you know, it's allowed us the opportunity to create more value for every barrel we produce. We'll dig into it here. First off, starting with our marketing strategy. This has been in place for the last decade, and it's really about three different components. It's a multipronged strategy to make sure that we get the best price for the barrels that we produce. The first component is market access, paramount to everything we do. Obviously, we need to ensure we can move our current and our future production.
Egress in Canada remains extremely challenged, and it's something that we are always looking around corners to make sure that we can move our product. We have very strong ties with Lara's development team and our long-term plan. For natural gas, specifically, we need to be ahead of the market by about six-eight years to ensure that we can secure takeaway. I'm pleased to say that we have takeaway secured on the gas side till the end of the decade, and on the liquid side, for future development phases of Attachie, so very, very strong. We also try to move our product on dual connected pipelines through our dual connected facilities. You know, we wanna, where possible, make sure we have no risk of operational upsets.
From the market diversification side, the diversification of markets for us, really, first and foremost, reduces volatility. Obviously, we wanna move our production into consuming regions at the lowest cost, and that's paramount to our strategy. As we grow, we're driving hard to ensure that we remain diversified within our portfolio. This isn't just natural gas. This is across all of our products. Lastly, it's around price optimization. It's around being nimble, utilizing the assets that we control, both pipeline and the ownership of our infrastructure, to create the most margin for our barrels. With that, I wanna play a video that describes our overall marketing strategy and hopefully provides some insight into how we move our product.
ARC Resources is a global leader in responsible energy development. As the largest condensate producer and the third-largest natural gas producer in Canada, ARC produces roughly 350,000 barrels of oil equivalent per day. Approximately 60% or 1.3 billion cubic feet of this average daily production is natural gas, while approximately 40% or 140,000 barrels per day is crude oil and liquids. Our goal is to connect this low-emissions energy to key consuming end markets at the lowest possible cost. Our diversified transportation portfolio helps us achieve this goal while capturing more value for every molecule we produce. For our natural gas, ARC has connectivity to several key consuming regions in North America, including right here in Western Canada.
We have contracted capacity to Malin in the Pacific Northwest, Chicago in the Midwest, Dawn in Southern Ontario, and Henry Hub on the Gulf Coast. This diversification provides optionality that allows us to better manage risk. It also allows us to participate in the global LNG market, where demand is expected to double by 2040. To date, we have announced three LNG agreements. On the U.S. Gulf Coast, ARC will supply approximately 140 million cubic feet per day of natural gas to Cheniere's Corpus Christi Stage III facility . From here, it will be liquefied and exported to key markets in Asia, where it will be used to meet domestic energy demand. On Canada's West Coast, ARC has announced two agreements.
The first, with an LNG Canada participant, where ARC will supply approximately 150 million cubic feet per day of natural gas, and with Cedar LNG, where we've signed a memorandum of understanding to supply 200 million cubic feet per day. These agreements provide access to premium markets, both domestically and internationally. Ultimately, Canadian LNG will provide energy security, displace more carbon-intense energy sources, and lower global emissions. In all, ARC's market access, scale, investment-grade credit rating, and leading ESG performance have supported our participation in the global LNG market. In addition to natural gas, approximately 40% or 140,000 barrels per day of ARC's production is crude oil and liquids, most of which is condensate. This condensate is primarily destined for Canada's oil sands to be used as a diluent in the transportation of bitumen.
ARC has contracted long-term capacity on two major pipeline systems to move our liquids production to Fort Saskatchewan, near Edmonton. From there, it is transported to oil sands producers near Fort McMurray and Cold Lake. Demand for condensate is expected to remain strong due to a shortage of supply in Western Canada. Through our confirmed transportation commitments in the area, we are well positioned to help meet strong demand for this high-valued product. To learn more about our marketing strategy, visit our website at www.arcresources.com.
I hope that video was helpful, giving an overview of how we move our product and the complexity of moving our product throughout North America. We have a dedicated team, and, you know, very high integration with all of our field operations to ensure that we are able to keep production flowing every day, especially as we get bigger. Moving into condensate, it's interesting, we spend a lot of time talking about gas, but condensate is actually the biggest revenue driver of our organization. As Terry mentioned, we are the largest producer of condensate in Western Canada. We produce roughly 75,000 barrels a day within Western Canada.
It's all of our condensate is separated at our own facilities and moved down two separate pipelines into the Edmonton area, where we sell our condensate into two different liquid hubs. We have direct long-term sales agreements with the major oil sands producers, and we're very constructive condensate prices going forward as we see oil sands production continuing to increase and the need for diluent, therefore, continuing to increase, as well as the import pipelines that are required to balance the market remain full. Currently, we're short about 250,000 barrels a day in Canada of condensate, and it's the only product we produce that we are short in Canada. Very strong from that perspective. Into our natural gas strategy.
Again, we have a very diversified portfolio as we've talked a lot, this portfolio allows us to manage risk and participate in market dislocations. you know, as I mentioned, egress remains constrained out of Western Canada, we're very happy with the portfolio we have in place today. We have long-term contracts into all of these markets with renewal rights, this will be a staple of our diversification going forward. We've built this up over a decade, as Terry talked about, to get into the market now with the cost structure we have is not it cannot be replicated. It's something we continue to drive forward and look for, additional opportunities. We also supplement our physical diversification with financial diversification.
You can see the light blue wedge on the chart in 2023 and 2024, where we have financial instruments in place to help protect us against price risk and dislocation risk. Again, this is paramount to our strategy. We have a fun, strong, very strong fundamentals team internally, and we're always looking at where do we want to best position our gas prices. As we look out forward, again, Canada remains very constrained. LNG Canada, coming on in the middle of the decade is a great demand pull, but we still need export pipelines to move production to market.
In the U.S. side, we see very strong demand, primarily as a result of LNG growth out of the Gulf Coast, and we'll get into that and how we think this is an advantage that is great for North America, great for the world, but also great for us with the positions that we have. This portfolio approach has allowed us to participate, as I said, in market dislocations. We consistently outperform peers, and it served us well, especially over the past decade, in periods of low pricing. Over the past decade, ARC has received an average gas price that's 20% above the AECO index price. Just to illustrate and show how advantageous this has been for our business.
As we think about global LNG and the globalization of gas, this really presents an opportunity for further portfolio diversification. We view LNG as just a complementary extension to our market diversification business. It's moving further downstream, but we're still moving markets into consuming regions. You know, we feel this is gonna be fueled by North American supply and the proximity to our pipe or of our pipelines to the liquefaction facilities, really allows us the ability to move our production into the LNG market. We see demand for LNG increasing almost double over the next 20 years. Again, this is fueled by Asia, but also static demand from Europe, that continues to be in place.
To summarize where we are at on the LNG side, you know, the strengths that we bring that can't be replicated by our peers, include our size, our scale, our investment-grade credit rating. I think the link to our asset base and the, and the amount of inventory we have allows us to sign these 15-20-year contracts, as well as our investment-grade credit rating. This, you know, as part of the business combination with Seven Generations Energy, this was a strategic driver to allow us to enter into these long-term deals. To date, we've entered into three long-term gas supply deals. Again, we're trying to make sure that we're creating market for the production that we're producing. The first deal that we signed a couple of years ago was with LNG Canada.
This was really a strategic entry point into having our Sunrise asset directly connected into the Coastal GasLink pipeline. We're the only non-equity partner to have our facilities directly connected into Coastal GasLink. This deal is a long-term premium to AECO, so it is a Western Canadian-based price with a premium. Again, the drivers of that were the connectivity into that pipeline. The second deal we announced a year ago is with Cheniere. We're really pleased with this deal. This is the first internationally priced deal that ARC has done with a great counterparty that has very similar values to the values that ARC provides. This is a JKM and Asia netback deal, where we have fixed liquefaction, fixed shipping for the term of the contract.
The beauty that Cheniere brings to this is they provide all the operational expertise. So we are not at risk for any logistical things that can happen in a value chain that's moving gas across the world. Recently, we've just announced a partnership with Cedar LNG, an MOU, that was back in March. This is a really exciting project for Canada. This utilizes the Coastal GasLink pipeline, and it's the first indigenous-owned LNG facility in Western Canada. It's a 50/50 partnership between Pembina and the Haisla First Nation. We're in the early phases of commercial negotiations on this, but very excited to move forward, and this project would likely come on in 2028 or 2029.
Lastly, we are actively working on securing another Gulf Coast transaction, and you can see on the map, we do have capacity that is very difficult to get into the Gulf Coast, and we are looking to solidify another LNG deal by the end of the year. These deals, once fully executed, will meet our target of up to 25% of our future production being moved into international markets. Most importantly, as we focus on the financial implications, you know, as it is with all of our business, our cost structure is so important. We've spent a lot of time looking at all the various liquefaction facilities across North America, and we're making sure that we can liquefy and ship our gas for the lowest cost.
We can land our gas from Western Canada into Asia for about $5-$6 USD per MMBtu. Assuming a $3 AECO price, that would make our breakevens about $8. The chart below here shows the significant torque to our business. You know, obviously, we look at the upside, but we're also making sure we can manage the downside and the way these contracts are structured, we're very happy with the exposures. We're very excited to build into this new venture for our business, and very happy and pleased to share it with everybody. I guess one very important point as we look to our business into the future is the ESG characteristics.
As we've spent time in Europe and Asia, you know, this is really starting to become on the forefront of everybody's minds. With that, we have a great story to tell, and I'll pass it off to Armin.
Thanks, Ryan. As Ryan mentioned, our ARC's low emissions production is an important part of our LNG story. I want to spend a few minutes to present our environmental performance. The most recent data from 2021 shows that ARC continues to deliver a top decile performance in terms of both greenhouse gas emissions as well as methane intensity. The data on this slide includes both the Scope one and Scope two emissions, which for ARC includes emissions from our own and operated infrastructure. It is important to highlight that because in comparison, some of our peers that we show on this slide report lower emissions as they benefit from processing their gas through third-party facilities. Over the last few years, we've been able to demonstrate our ability to reduce ARC's emission in a significant and meaningful way.
In Northeast BC, our journey started in 2011 when we electrified our first Dawson plant. Since then, we have electrified all our facilities in Northeast BC. Dawson III and Four plant is the last plant that we just finished electrifying about a couple of weeks ago. The electrification of Northeast BC asset has resulted in about 22% reduction in our absolute emissions in BC since 2017. It is important to note that in the same period of time, we've increased our production by 57%. We believe with rising carbon tax, this work will help us in continuing to deliver low-cost production in Northeast BC. We also strongly believe in technology and the role it plays in reducing our sector's emission in coming years. To support this vision, ARC has committed to investing CAD 50 million in clean technologies.
These investments will not only give us the opportunity to evaluate some of these innovations, but will also give us the chance to use them at ARC facilities to further reduce our emissions. To date, we have invested about CAD 40 million of that budget, which has provided us an exposure to a whole suite of technologies, from detection and monitoring to various carbon capture technologies, as well as investment in a hydrogen technology that has the potential to reduce our facilities emission in future. With that, I pass it over to Terry for his final comments.
Well, apparently, we all have favorite slides here. Maybe this is your favorite slide, because it's a good slide. We've gave you a lot of information here today, so I want to summarize from my perspective, what the top takeaways are. World-class assets, there is no question we have world-class assets. We have a balanced commodity mix with being the largest condensate producer. That's a strategic advantage for ARC. The Kakwa inventory, we have at least 15 years of keeping Kakwa production flat at 180,000 BOE a day. Attachie liquids rich development, well, that property can rival the production of Kakwa to 180,000 BOE a day. That's big. Our unmatched high quality-
assets have the capability to produce and sustain production up to 500,000 BOE a day for decades. We're committed to shareholder returns. We have shown that this approach to capital allocation will be balanced in the five years. We're gonna invest in Attachie and grow that free cash flow. We're gonna buy back shares when they're attractive. We're gonna increase the dividend on an annual basis. There's a lot of free cash flow coming back to shareholders today and more tomorrow. We have a margin expansion advantage. You heard Ryan talk about the LNG. The scale of our business, combined with the decades of that high-quality inventory, allows ARC to pursue these global diversification and margin expansion opportunities. This is an important differentiator 'cause not many of our peers can actually do this. It's different for us.
We're big enough, we have the resource, we have the capability to actually grab those margins. That's different. I'd say to close on, this is probably the most important takeaway, is that we have the right people and the high-performance culture to deliver on this five-year plan. That's the most important piece is the culture and the people. To close, I have a few thoughts. When I reflect on my 23 years at ARC, I am very proud of how we've built this company to be one of Canada's largest and most respected energy producers. Now, with our increased scale, we can do more. We are expanding our reach to be a global leader in delivering responsible energy to the world at a time when the world needs more responsible energy.
That makes me proud that our company of 28 years can help create a better world for everyone. That concludes our formal presentation. I want to thank everybody online for attending, and we'll say goodbye to them.