The northern frontier on the eastern side of the continent isstepping up work on adding new supplies to the North Americannatural-gas market, along with promoters of a development andpipeline revival in Alaska and the Northwest Territories.

Canadian industry and government sponsors expect results soonfrom an array of studies under way on tapping discoveries offshoreof Newfoundland and Labrador. The province’s Minister of Energy,Paul Dicks, urged on the collaborative work by a consortiumorganized as the Natural Gas Stakeholder Committee, saying “thiscooperative approach will help facilitate timely and responsiblenatural gas development.” Committee chairman Rex Gibbons, a formerNewfoundland energy minister, predicted results of the four-partcanvass of northeastern gas opportunities would start arrivingwithin four months. The research, being done by government andindustry agencies, includes a market analysis, a review of pipelinepossibilities, an examination of non-pipeline options and aneconomic impact assessment.

Backers of the work include the Newfoundland Ocean IndustriesAssociation, the Atlantic Canada Opportunities Agency, theNewfoundland energy department, the Canada-Newfoundland OffshorePetroleum Board, Natural Resources Canada, Industry Canada, theCanadian Association of Petroleum Producers, Newfoundland andLabrador Hydro and Newfoundland Power.

The federal cabinet minister responsible for the opportunityagency, described the effort as building “a base of informationregarding possible development options, founded on objectiveprofessional analysis of the realities of resources, technologies,markets and economics.” Newfoundland Industry Minister Sandra Kellyadded “we are not looking for one specific solution orrecommendation. Rather, we are assessing a range of possibleoptions, as well as local and export market potential. Mydepartment is very interested in that capability, and committed toexploring ways it could be put to use.”

The Newfoundland effort has the same starting point as the workin the northwest on reviving the Alaska Natural Gas TransportationSystem or a Mackenzie Delta pipeline. The East Coast stakeholdersalso start with consensus forecasts that demand will continue torise around the world and in Canada, at least, gas is likely torepeat its 1999 performance of generating more cash flow for thepetroleum industry than oil. Earlier stages of the work documentedthe extent of gas resources offshore of Newfoundland and Labrador.The offshore petroleum board, a collaborative federal-provincialagency, has since raised expectations of the resource endowment.

The latest estimates raised the count of known Newfoundland gasreserves by 12% to 9.3 Tcf. The deposits encircle the island ofNewfoundland and stretch to the northern tip of Labrador in a bandup to 218 miles wide.

Reserves credited to the Hibernia oilfield 180 miles out to seaon the Grand Banks, where production has been under way since late1997 with gas being re-injected, have gone up 40% to 1.4 Tcf. Forthe nearby White Rose oilfield, in line to become the third GrandBanks production platform reasonably soon after Terra Nova startsup in first-quarter 2001, the board has also raised gas-reservesestimates by 40% to 2.1 Tcf. Development proposals range from theTexas-based Tatham organization’s blueprint for a subsea pipelinegrid spanning the East Coast from Newfoundland to New England tofleets of shuttle tankers using new technology for compressing gasor converting it to liquids. While concentrating on exports toachieve volume, all projects include supplying Newfoundland withgas – a political must in an area paying fearsome prices to rely onoil and hungry for associated development such as petrochemicals tocounter double-digit unemployment rates.

Gordon Jaremko, Calgary

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