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EnCana Panuke Plan Moves Forward

EnCana Corp. on Thursday submitted a Development Plan Application with Canadian regulatory officials to restart its dormant Deep Panuke natural gas project, located offshore Nova Scotia. A decision by officials on whether to proceed on the project is expected by summer.

Deep Panuke is located about 45 kilometers (28 miles) west-southwest of Sable Island and 250 kilometers (155 miles) southeast of Halifax. EnCana, which at one time estimated Panuke's reserves at 1 Tcf, shelved the highly touted project in 2003 following disappointing exploration results (see Daily GPI, Feb. 18, 2003). Last summer, however, the producer and Scotian officials established the framework to restart development under an Offshore Strategic Energy Agreement (see Daily GPI, July 5).

In the plan, EnCana cut its estimated production target by 25% to 300 MMcf/d from 400 MMcf/d. EnCana envisions building a Mobile Offshore Production Unit, subsea flow lines and wells and an export pipeline. Among other things, the agreement provides for five onshore rigs to be built in Nova Scotia with financial assistance from EnCana. The OSEA also outlines job expectations, industrial benefits, royalties and payments for research and development for the gas field. And it guarantees 1.35 million hours of work in Nova Scotia, with 850,000 hours to be undertaken by Nova Scotians.

Nova Scotia in October turned down an offer by EnCana to take ownership in the export pipe and pay for its costs (see Daily GPI, Oct. 30). EnCana has not indicated whether it will offer an ownership stake in the pipeline to another entity. It also has not indicated where the gas would be processed once it comes ashore.

The Canada-Nova Scotia Offshore Petroleum Board (CNSOPB) and the National Energy Board (NEB) said a public review of the project will be led by Linda Garber, a former board member of the Nova Scotia Utility and Review Board, and NEB's Kenneth Bateman. Garber will coordinate the review as a commissioner of the CNSOPB; Bateman will review and report on the pipeline aspects of the Deep Panuke project that are under NEB jurisdiction.

"This public review presents a valuable single-window for stakeholders and the public to participate," said acting CNSOPB CEO Diana Dalton. "We're confident this cooperative approach will provide an assessment rigorous enough to address public concerns, while efficient enough to meet the practical needs of industry."

Garber and Bateman will coordinate the project review that will lead to public hearings. Additionally, public consultation sessions are scheduled for Nov. 27 at the Marriott Halifax Harbourfront and Nov. 29 at the Chedabucto Place Educational Centre in Guysborough to answer preliminary stakeholder questions.

A website with relevant Deep Panuke regulatory review information is expected to soon be available online at www.deeppanukereview.ca.

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