While it is no secret that North American natural gas production is on the decline due to declining reserves, newer production fields in Canada and the United States continue to stem the tide. On Wednesday, Halifax, NS-based Corridor Resources reported that its McCully Gas Field in New Brunswick has begun pumping 35 MMcf/d of natural gas into the Maritimes & Northeast Pipeline (M&NP) for delivery in Canada and the northeastern United States. The action marks the first export of gas from an onshore site in Atlantic Canada to New England.

At a ceremony Wednesday, a gas flare marked the start of production from the field located in Penobsquis, NB. The company said production is expected to grow to 45 MMcf/d by November, creating enough energy to heat 250,000 homes. New Brunswick Premier Shawn Graham and Corridor Resources CEO Norman Miller officially turned the valve and started the flow of New Brunswick natural gas towards homes and businesses in Canada and the United States.

“This is the culmination of a long journey,” said Norman Miller, “but we’ve had many partners with us on the journey including our contractors, the community members who have worked with us, Potash Corporation of Saskatchewan Inc. and the Province of New Brunswick. With their support we have arrived at this event.”

Corridor began drilling the McCully C-67 well in April 2005 (see Daily GPI, April 21, 2005; Feb. 9, 2006). The McCully field is estimated to hold more than 1 Tcf of gas in place in the Hiram Brook formation. Two wells have been on production in the field for four years, supplying natural gas at a combined average rate of 2 MMcf/d to a limited local market.

Corridor said it has been exploring for natural gas in southern New Brunswick since 1995, “encountering and overcoming many challenges” on the road towards production of natural gas from depths of more than a mile and a half below Penobsquis in the Kennebecasis Valley.

The McCully project includes 13 initial production wells, a field gathering system, processing plant, and a 50-kilometer pipeline lateral connection to M&NP. The C$200 million project will generate approximately C$6 million in royalty revenues for the project annually, based on the planned initial rate of production.

“Our initial production at this facility is just the beginning. We have a continuous development drilling program underway to add gas reserves and production,” said Miller. “This will include evaluation of deeper sediments at McCully, as well as other prospects in the region. In many ways this announcement is a stepping stone to potential future projects.”

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