EnCana Corp.’s Deep Panuke project off the coast of Halifax in Nova Scotia remains on schedule to ramp up in 2010, the project director said Monday.

Dave Kopperson, vice president of the producer’s Offshore East Coast Canada division, said the facility would mark the sixth offshore project for Canada’s Atlantic region. He provided an update for a luncheon crowd at the Offshore Technology Conference in Houston.

The Deep Panuke is unique among EnCana’s oil and gas projects in that it is the only one in the offshore. The Calgary-based producer’s key onshore gas exploration is in Colorado, Wyoming, East Texas, Alberta and northeast British Columbia. The Deep Panuke asset was a legacy from EnCana’s two predecessor companies, PanCanadian and Alberta Energy, and it wasn’t like anything else in the portfolio. But Kopperson said it is a keeper.

The EnCana board approved the project last year after federal regulators gave the go-ahead on the company’s development plan (see Daily GPI, Oct. 26, 2007). The C$700 million project, located about 175 kilometers off the coast of Halifax, is expected to deliver more than US$400 million in royalties to the Nova Scotian province over its 13-year life.

“The facility is being designed for 350 MMcf/d and it will have estimated production of 200-300 MMcf/d on average,” Kopperson said. He pointed to constraints on the U.S. portion of Maritimes & Northeast Pipeline, which was addressed by the pipeline operator in a proposal to increase capacity earlier this year (see Daily GPI, Feb. 6). “We have had exceptional gas flows and test rates…over 250 MMcf/d achieved in wells from this region.” EnCana has contracted with Maritimes for 250 MMcf/d of capacity and plans to produce more if interruptible service is available.

Kopperson, who volunteered to take over the Deep Panuke project in 2002, said the province of Nova Scotia has been a key reason that EnCana decided to move forward.

“Nova Scotia is good for business,” he said. “EnCana has been part of the fabric of Nova Scotia for more than a decade.”

EnCana took a regulatory time out on Deep Panuke in 2002 to determine whether to proceed. Faced with an arduous regulatory process that was expected to last for years, Nova Scotian officials stepped up and were able to complete project approval from federal and provincial regulators within 11 months, Kopperson noted. “We had everything we needed for a project, and that gave us confidence in the process, which is an important part of the work.”

With an agreement in hand and a province that wanted and needed the work, EnCana and Nova Scotia achieved a “win win,” he said. “The province was really interested in Deep Panuke and knowing the province was on our side was important…Many didn’t think we’d get the project across the goal line, but we did. Now the days are busy in Halifax and they are expected to get busier in 2008 and 2009.

“In short order we will award a contract for the fabrication block, and we expect to have a contract by the end of May…and a new survey this spring. Throughout 2008 we’ll continue to issue bidding opportunities as the company moves from design to construction. In the months to come, there will be increasing local activity. Before the end of the year we’ll have a shore base…and further ahead in 2009, the drilling program will get under way by the end of the second quarter of 2009…That day will be sooner than we think.”

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