Search for Gas on Northeastern Frontier Picks Up Speed
The northern frontier on the eastern side of the continent is
stepping up work on adding new supplies to the North American
natural-gas market, along with promoters of a development and
pipeline revival in Alaska and the Northwest Territories.
Canadian industry and government sponsors expect results soon
from an array of studies under way on tapping discoveries offshore
of Newfoundland and Labrador. The province's Minister of Energy,
Paul Dicks, urged on the collaborative work by a consortium
organized as the Natural Gas Stakeholder Committee, saying "this
cooperative approach will help facilitate timely and responsible
natural gas development." Committee chairman Rex Gibbons, a former
Newfoundland energy minister, predicted results of the four-part
canvass of northeastern gas opportunities would start arriving
within four months. The research, being done by government and
industry agencies, includes a market analysis, a review of pipeline
possibilities, an examination of non-pipeline options and an
economic impact assessment.
Backers of the work include the Newfoundland Ocean Industries
Association, the Atlantic Canada Opportunities Agency, the
Newfoundland energy department, the Canada-Newfoundland Offshore
Petroleum Board, Natural Resources Canada, Industry Canada, the
Canadian Association of Petroleum Producers, Newfoundland and
Labrador Hydro and Newfoundland Power.
The federal cabinet minister responsible for the opportunity
agency, described the effort as building "a base of information
regarding possible development options, founded on objective
professional analysis of the realities of resources, technologies,
markets and economics." Newfoundland Industry Minister Sandra Kelly
added "we are not looking for one specific solution or
recommendation. Rather, we are assessing a range of possible
options, as well as local and export market potential. My
department is very interested in that capability, and committed to
exploring ways it could be put to use."
The Newfoundland effort has the same starting point as the work
in the northwest on reviving the Alaska Natural Gas Transportation
System or a Mackenzie Delta pipeline. The East Coast stakeholders
also start with consensus forecasts that demand will continue to
rise around the world and in Canada, at least, gas is likely to
repeat its 1999 performance of generating more cash flow for the
petroleum industry than oil. Earlier stages of the work documented
the extent of gas resources offshore of Newfoundland and Labrador.
The offshore petroleum board, a collaborative federal-provincial
agency, has since raised expectations of the resource endowment.
The latest estimates raised the count of known Newfoundland gas
reserves by 12% to 9.3 Tcf. The deposits encircle the island of
Newfoundland and stretch to the northern tip of Labrador in a band
up to 218 miles wide.
Reserves credited to the Hibernia oilfield 180 miles out to sea
on the Grand Banks, where production has been under way since late
1997 with gas being re-injected, have gone up 40% to 1.4 Tcf. For
the nearby White Rose oilfield, in line to become the third Grand
Banks production platform reasonably soon after Terra Nova starts
up in first-quarter 2001, the board has also raised gas-reserves
estimates by 40% to 2.1 Tcf. Development proposals range from the
Texas-based Tatham organization's blueprint for a subsea pipeline
grid spanning the East Coast from Newfoundland to New England to
fleets of shuttle tankers using new technology for compressing gas
or converting it to liquids. While concentrating on exports to
achieve volume, all projects include supplying Newfoundland with
gas - a political must in an area paying fearsome prices to rely on
oil and hungry for associated development such as petrochemicals to
counter double-digit unemployment rates.
Gordon Jaremko, Calgary