Mobil Corp. and Duke Energy announced the signing of additionalmarket agreements with Canadian buyers on Friday for Sable Islandgas production, which is due to come on stream next November withthe completion of the Maritimes &amp Northeast Pipeline project.

The new contracts were signed with Stora Port Hawkesbury Ltd., alarge pulp and paper producer that agreed to purchase 10.5 MMcf/dof gas over the five-year life of the contract, and CGC Inc.(Canadian Gypsum), a building products company that agreed topurchase about 1 MMcf/d. The gas is being sold through Duke EnergyMarketing L.P., the Canadian trading affiliate of Duke EnergyTrading and Marketing, L.L.C., which is 60% owned by Duke Energyand 40% owned by Mobil.

Paul Bennett, vice president, Nova Scotia Business Unit, MobilCanada, said the sales contracts provide the gas supply needed tohelp ensure the economic viability of the Maritimes lateral toPoint Tupper. Both of the new buyers are located in Cape Breton,which means all of Mobil’s Sable Gas under contract is being soldto Canadian companies. Another 86 MMcf/d package is going to IrvingOil in New Brunswick. With the new agreements, Mobil has undercontract about 38%, or 97.5 MMcf/d, of its 51% share of SableIsland gas production.

“This level of sales to Canadian customers so early in theproject is better than we had anticipated,” said Lou Allstadt,President of Mobil’s Americas Exploration and Producing. In fact,in the beginning Maritimes anticipated nearly all of the gas fromSable Island would be traveling south to New England markets.

A Mobil spokesman said the fact that Canadian companies arejumping on board before the Americans merely reflects a hesitancyof U.S. buyers to sign up prior to Maritimes Phase II beingapproved by FERC, which handed down its final decision in August.

“With the recent approval to begin construction of Phase II ofthe Maritimes &amp Northeast Pipeline into the Northeastern UnitedStates, we look forward to being able to reach other new industrialand electric generator markets in the Canadian Maritime Provincesand the Northeastern United States with clean-burning natural gas,”Allstadt added.

Rocco Canonica

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