Nova Scotia Premier Rodney MacDonald's office has confirmed the premier will make an announcement Friday about the redevelopment of the Deep Panuke natural gas project, which is located offshore about 155 miles southeast of Halifax. The project, put on hold three years ago by EnCana Corp. (see Daily GPI, Feb. 18, 2003), originally was estimated to hold 1 Tcf of gas and was expected to produce 400 MMcf/d.
In recent weeks, EnCana indicated that it hoped to file a development plan on Panuke this year. The Calgary-based independent delayed the project to conduct a comprehensive review and also was said to be in discussions with Scotian officials about regulatory issues and local benefits.
"The premier will have something to say about the Deep Panuke development on Friday," EnCana spokesman Alan Boras said. Boras said it will be "good news," but he could not provide any details. MacDonald and Nova Scotia Energy Minister Bill Dooks are scheduled to speak to the Offshore/Onshore Technologies Association of Nova Scotia at a breakfast meeting on Friday.
The Deep Panuke had been considered a prize when it was discovered in early 2000 and it has remained one of Nova Scotia's best hopes to expand its offshore energy industry (see Daily GPI, Aug. 10, 2000; Feb. 25, 2000). The Sable Offshore Energy Project is now the only field in production offshore Nova Scotia, but it is considered by some to be in terminal decline (see Daily GPI, Jan. 10).
Earlier this month, RBC Financial Group chief economist Craig Wright said Nova Scotia was positioning itself for "continued fiscal stability and steady growth" in the coming year, partly because of the Panuke redevelopment.
According to Wright, "after ongoing deliberations over profitability, the Deep Panuke gas project owners have announced their renewed intentions to file development plans later this year. Discussions are under way with the government regarding fiscal and regulatory terms for the project, and this could enhance the province's fiscal outlook." He also said it was a "good sign for the energy sector as the Bear Head [liquefied] natural gas terminal (LNG) has been delayed, due to difficulties in securing a supply source."
The proposed Bear Head LNG terminal on Cape Breton Island, NS, which was acquired by Anadarko Petroleum Corp. in 2004, already has been approved by Canadian regulators, but the project was put on hold until LNG supply is found (see Daily GPI, June 8; July 1, 2005).
About a year after calling the timeout on its Panuke development, EnCana partnered with junior independent Marauder East Coast Inc. on some exploratory drilling in the region (see Daily GPI, Dec. 10, 2004). Seven months later, Marauder executed a farm-in agreement with EnCana to participate in an exploratory gas well, the Dominion J-14 well, which turned up a dry hole (see Daily GPI, July 25, 2005). A sidetrack well by the duo was completed earlier this year.
©Copyright 2006 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.