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A target date of 2021 has been set to eliminate the last trace of Canada’s depleted 19-year-old Atlantic natural gas production network on the seafloor near Sable Island and the east coast of Nova Scotia.
As leader of the Sable Offshore Energy Project (SOEP), ExxonMobil Canada Ltd. has posted a formal project description for a four-year cleanup. A detailed “leave to abandon” application to the National Energy Board is scheduled early this year.
The steps confirm that depletion of subsea reserves and competition from unconventional gas reserves in the U.S. Northeast (i.e. Appalachia) ended the need for the 200-square-kilometer (80-square-mile) SOEP web of 22 wells, seven production platforms and 340 kilometers (204 miles) of pipelines.
Abandonment was foreshadowed by the first in an anticipated series of gas delivery service applications to the NEB. The cases would end the role of Maritimes & Northeast Pipeline (M&NP) since 1999 as a southbound route for SOEP exports to the U.S. Atlantic seaboard.
Emerging industry plans involve converting M&NP into a northbound route for New Brunswick and Nova Scotia to import Lower 48 gas. An NEB ruling is due soon on the first multi-year switch to imports, a contested discount toll deal landed by Irving Oil’s 313,000 b/d refinery in Saint John.
As the NEB toll and abandonment cases evolve, Enbridge Inc. is seeking approval from the U.S. Federal Energy Regulatory Commission for a project called Atlantic Bridge to enable exports of Marcellus and Utica shale gas to New Brunswick and Nova Scotia.
Subsea production sank by nearly 80% from a 2001 peak of about 600 MMcf/d to a 120 MMcf/d range in the 2016-17 heating season, according to records of the Canada-Nova Scotia Offshore Petroleum Board. Encana Corp.’s nearby smaller Deep Panuke platform has only run as a peaking service during eastern cold snaps since 2015.
The SOEP cleanup schedule calls for well plugging and abandonment to start this year and be completed by the end of 2019, with offshore platform and onshore processing plant removals in 2020, and disposal/recycling of all the hardware by late 2021.
The SOEP consortium -- ExxonMobil, Shell Canada Ltd., Imperial Oil Ltd., Pengrowth Energy Corp. and Mosbacher Operating Ltd. -- has declared intentions to seek buyers for two onshore gas processing plant sites on the Nova Scotia coast.
Liquefied natural gas (LNG) export terminals are proposed for the region. But the sponsors set no construction targets and said supplies must be secured before attempting to advance the projects further.
Replacement of SOEP with onshore production is geologically possible but politically out of the question currently.
Earth sciences agencies estimate 67 Tcf of unconventional gas await development in New Brunswick, and that Nova Scotia has smaller but potentially commercial deposits. But after public inquiries demonstrated popular disdain for the industry, both provinces enacted moratoriums against horizontal drilling and hydraulic fracturing (fracking).
At a public meeting on the abandonment project, the SOEP group made no attempt to rescue fracking but circulated a reminder that gas supply development pays off for all concerned while reserves and production last.
Since launching the offshore project, SOEP reported spending C$2.8 billion ($2.2 billion) in Nova Scotia, C$1.9 billion ($1.5 billion) in royalties to the provincial government, sustaining 300 facilities operating jobs, and contributing to multiple training and research programs.
Said the SOEP consortium, “Sable introduced natural gas as a new source of clean energy in this part of Canada. It allowed for the development of pipeline infrastructure that now connects this market to North America’s natural gas supply market.”