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Four Deep Panuke Natural Gas Wells Producing

Encana Corp. now has four natural gas wells producing to sales at the Deep Panuke platform offshore Nova Scotia, the producer said Wednesday.

Production ramped up on Aug. 11. All four wells today are cumulatively producing at a restricted rate of about 175-200 MMcf/d.

Final work continues on the platform's processing systems "to bring the platform to its full capacity of 300 MMcf/d," the management team said.

Encana of late has moved toward more liquids production to take advantage of higher oil prices, but it remains one of the biggest natural gas producers in North America and the largest in Canada.

Deep Panuke is a legacy project that was begun long before Encana even became a standalone operation. Predecessor PanCanadian Petroleum Ltd. began commercial development of the offshore gas field, 200 kilometers southeast of Halifax, in 2011 after discovering the field half a year earlier (see Daily GPI, Feb. 26, 2001;Aug. 20, 2000). At that time PanCanadian expected the field to produce 400 MMcf/d by startup in 2005.

Fast-forward eight years, through name changes, partners coming and going, restructured production plans and several delays, Encana in August was given the green light to start up the platform by the Canada-Nova Scotia Offshore Petroleum Board -- 13 years after the field was discovered (see Daily GPI, Aug. 5).

Whether Panuke's gas has anywhere to go has been a lingering question, but there is optimism.

RBN Energy LLC analyst Housely Carr said in August that Panuke may find an opening because New England's "appetite for gas is clearly growing" (see Daily GPI,Aug. 5). "In 2000, only 15% of the region's electricity was generated by gas-fired power plants; by 2012, more than 50% was. The trend is unlikely to reverse, given the need for utilities and independent power companies to shift from coal-fired power as environmental rules tighten."

In 2009 Repsol YPF SA contracted to buy all of the 300 MMcf/d of Panuke gas for the life of the project (see Daily GPI, Feb. 18, 2009). Repsol also owns 75% of the New Brunswick Canaport liquefied natural gas terminal in Saint John and the terminal, which has the capacity to produce up to 1.2 Bcf/d.

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