Producers Launch Sable Island; Promise Deliveries in 22 Months
With all regulatory approvals in place at both Federal and
Provincial levels, sponsors of the Sable Island Offshore Energy
Project last week signed both their key commercial agreements and
the Facilities Alliance Agreement to engineer, construct and
install production and gathering facilities to handle delivery of
3.5 Tcf of gas from offshore Nova Scotia. This formally commits the
owners to the $2 billion first phase, which will deliver the first
gas in late 1999.
"Today marks the most important step taken in the history of our
industry in Nova Scotia," Mobil Oil Canada president Jerry Anderson
said at the official launch last Wednesday. "We have formally set
in motion the engineering, procurement, construction and
installation of the first phase to produce gas from the Venture,
North Triumph and Thebaud fields.
"And we're putting down roots here as we establish a new
company, Sable Offshore Energy Incorporated (SOE Inc.), based in
Halifax, to manage the project and oversee operations through its
life," Anderson said.
John Brannan, currently Mobil Oil Canada's well operations
manager, will become general manager of SOE Inc. and Lynn Zeidler
of Shell Canada will continue as Tier 1 (first phase)
implementation manager. They will be responsible for day-to-day
management of the project and will report to the owners through the
SOE Management Committee.
The project Facilities Alliance Agreement, signed today,
formalizes the previously announced alliance among the seven
companies [Allseas Canada Ltd., BBA, Elsag Bailey (Canada) Inc.,
Kvaerner Oil and Gas Ltd, MMIndustra/BrownandRoot Joint Venture,
Saipem UK Ltd., and AGRA Monenco/BrownandRoot Joint Venture] to
carry out the engineering, procurement, construction and
installaton of the facilities.
"We have a very tight program to achieve the promised target of
gas-to-market in late 1999. That's when we have told our customers
they can expect gas and that's when we intend to get it to them.
From today, we have 22 months in which to build the first phase.
The main Thebaud platform will take an estimated 17 months to build
and place. Our critical path flows from that schedule," Anderson
All the owners paid tribute to the support received in Nova
Scotia and Canada generally in the past three years. "Without this
support, we would not be here today confirming the largest single
investment in Nova Scotia's history," Anderson added. "We are now
in an exciting phase. A lot will happen in the next six months.
Nova Scotia has already started to feel the effects of having an
average of one million dollars a day being pumped into the economy.
This will continue over the next two years."
The owners said the 1996 and 1997 3D seismic programs were
showing greater reserve potential than initial estimates. Beyond
the 3.5 Tcf to be tapped in the current project, the Geological
Survey of Canada predicts the Shelf probably contains at least a
further 13 Tcf of recoverable gas.
The SOE owners are: Mobil Oil Canada, 50.8%; Shell Canada,
31.3%; Imperial Oil, 9%; Nova Scotia Resources 8.4%; Mosbacher