Kicking off the next phase of the Sable Island project, Exxon Mobil Corp. said Tuesday that natural gas production has begun at the Alma field, the first Tier 2 production from the Sable project, located 125 miles offshore Nova Scotia.

The Alma field is currently producing about 120 MMcf of gas and 3,000 bbl of condensate and natural gas liquids per day. With the addition of Alma, average daily production at the Sable project is approximately 500 MMcf of natural gas and 20,000 bbl of associated condensate and natural gas liquids.

Located in 220 feet of water, the Alma platform is connected to the Sable project’s Thebaud central processing platform via a 32-mile subsea pipeline.

Production from the Sable project began in late 1999 when Tier 1 production came online. The first phase included three offshore fields — North Triumph, Venture and Thebaud — processed at two onshore facilities in Nova Scotia.

ExxonMobil said the second Tier 2 field, South Venture, is currently under development in Halifax, with production expected in late 2004.

The Sable project is owned by ExxonMobil Canada (50.8%), Shell Canada Limited (31.3%), Imperial Oil Resources (9%), Pengrowth Corp. & Emera Offshore Inc. (pending sale to Pengrowth Corp., closing mid-December) (8.4%) and Mosbacher Operating Ltd. (0.5%). Gas from the Sable project is transported to markets in the Canadian Maritime Provinces and to the northeastern United States via the Maritimes and Northeast Pipeline.

Just last week, Shell Canada announced that it is aiming to spend $1.1 billion in 2004 on capital and exploration projects, with much of it directed toward natural gas in the western Foothills area and Mackenzie Valley and the Sable Offshore project in the East (see Daily GPI, Nov. 24).

The 2004 program for Shell Canada’s resources business segment includes $170 million for exploration and approximately $395 million for development projects, with almost one-half of each to be spent in the Foothills area of Western Canada. The balance of the 2004 exploration program is mainly focused on growth prospects in frontier areas. Approximately 40% of the 2004 development program is for continued development of Tier 2 fields and compression facilities for the Sable project.

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