EnCana Corp.'s Deep Panuke offshore natural gas plan moved forward Tuesday after an independent commissioner appointed by the Canada-Nova Scotia Offshore Petroleum Board (CNSOPB) recommended tentative approval. A final decision on whether to allow EnCana to ramp up its dormant development of the offshore Nova Scotian field is expected this summer.

EnCana requested and was granted a regulatory time-out on the C$1.1 billion (US$700 million) project in early 2003 because of uncertainty over the estimated reserves and market development (see Daily GPI, Feb. 27, 2003; Feb. 18, 2003). Following an extensive internal study, the Calgary-based producer revised its plans and reduced its production estimates by 25% (see Daily GPI, Aug. 30, 2006). The plan envisioned production of 300 MMcf/d instead of the original estimate of 400 MMcf/d. Deep Panuke's recoverable reserves are pegged at 632 Bcf.

In a 72-page report, Linda Garber, who was appointed by the CNSOPB in November 2006 to conduct a public review of EnCana's application to develop the Deep Panuke field, recommended approval -- with some stipulations. Her recommendation, along with a decision by the National Energy Board's Kenneth Bateman, are expected to sway the final decision by CNSOPB this summer.

Garber accepted EnCana's development plans, including its proposal to reinject sulfur dioxide from the project into subsea wells. However, she said she would not recommend approval of EnCana's benefits plan because it does not conform to the benefits plan and definitions used by CNSOPB. Nova Scotia's deal with EnCana requires 850,000 of the 1.35 million hours of work involved be assigned to "Nova Scotia person hours." Garber also said "there are no provisions, other than making monies available, with respect to education and training, and research and development." Those provisions are expected to be revised in the coming weeks.

A copy of the report is available at deeppanukereview.ca or by contacting the CNSOPB at (902) 422-5588.

©Copyright 2007 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.