El Paso Corp. has notified FERC that an application for its Blue Atlantic Transmission pipeline project will be delayed six months or longer due to a slowdown in the development and production of natural gas supplies off the coast of Nova Scotia.

“Major oil and gas companies have announced plans to forgo drilling activities this year in the region. Due to these announcements, the Blue Atlantic team must adjust its schedule for engineering and design of the pipeline, while continuing to focus on preparing its regulatory applications” to be filed when drilling resumes, El Paso said in an April 11 letter to the agency.

The company told FERC not to expect an application for the Blue Atlantic pipeline before the third or fourth quarter of 2004. El Paso initially had planned to submit an application during the first quarter of 2004. In the meantime, it asked the agency to terminate its pre-filing docket, as well as the process for hiring a third-party environmental contractor for the project.

El Paso, however, dismissed any suggestion that it was putting the Blue Atlantic project on the back burner.

‘We’re going to continue to work on this project. We’re not going away,” said Jack Lucido, vice president of major products, engineering with the El Paso Eastern Pipeline Group, a unit of parent El Paso Corp. “We still have our office open in Halifax,” he noted, adding that he was “optimistic and positive about the gas being out there.” El Paso is simply “aligning our schedule with producer schedules,” said a company spokesman.

The project would call for the construction of a nearly 1,000-mile, 36-inch diameter pipeline to transport up to 1 Bcf/d along a subsea route from the southern coast of Nova Scotia to markets in New York and New Jersey.

El Paso was one of several pipelines — Maritimes & Northeast Pipeline included — that embarked on major pipeline and expansion projects in response to the frenzied development and production activity in the Scotian Shelf region.

Some of the steam fizzled in March when EnCana Corp. sought a one-year suspension of its C$1.1 billion Deep Panuke development project due to uncertainty surrounding the project’s reserves, as well as unstable market conditions. Canadian regulators granted the producer’s request. In addition, there have been a series of drilling disappointments in the region.

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