Canadians Soaking Up Sable Gas
Mobil Corp. and Duke Energy announced the signing of additional
market agreements with Canadian buyers on Friday for Sable Island
gas production, which is due to come on stream next November with
the completion of the Maritimes & Northeast Pipeline project.
The new contracts were signed with Stora Port Hawkesbury Ltd., a
large pulp and paper producer that agreed to purchase 10.5 MMcf/d
of gas over the five-year life of the contract, and CGC Inc.
(Canadian Gypsum), a building products company that agreed to
purchase about 1 MMcf/d. The gas is being sold through Duke Energy
Marketing L.P., the Canadian trading affiliate of Duke Energy
Trading and Marketing, L.L.C., which is 60% owned by Duke Energy
and 40% owned by Mobil.
Paul Bennett, vice president, Nova Scotia Business Unit, Mobil
Canada, said the sales contracts provide the gas supply needed to
help ensure the economic viability of the Maritimes lateral to
Point Tupper. Both of the new buyers are located in Cape Breton,
which means all of Mobil's Sable Gas under contract is being sold
to Canadian companies. Another 86 MMcf/d package is going to Irving
Oil in New Brunswick. With the new agreements, Mobil has under
contract about 38%, or 97.5 MMcf/d, of its 51% share of Sable
Island gas production.
"This level of sales to Canadian customers so early in the
project is better than we had anticipated," said Lou Allstadt,
President of Mobil's Americas Exploration and Producing. In fact,
in the beginning Maritimes anticipated nearly all of the gas from
Sable Island would be traveling south to New England markets.
A Mobil spokesman said the fact that Canadian companies are
jumping on board before the Americans merely reflects a hesitancy
of U.S. buyers to sign up prior to Maritimes Phase II being
approved by FERC, which handed down its final decision in August.
"With the recent approval to begin construction of Phase II of
the Maritimes & Northeast Pipeline into the Northeastern United
States, we look forward to being able to reach other new industrial
and electric generator markets in the Canadian Maritime Provinces
and the Northeastern United States with clean-burning natural gas,"
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