EnCana Corp. has apparently scored success with a new natural gas well test in its suspended Deep Panuke project offshore Nova Scotia and could drill a second shallow-water well by the end of October, according to the company’s senior vice president for the East Coast. However, El Paso Corp., which two years ago proposed a gas pipe from Nova Scotia into the U.S. Northeast, said it would delay its project until more discoveries are made.

For the past few weeks, there had been unconfirmed rumors that the Calgary-based independent would revive its work in the Deep Panuke, but the company has made no formal announcements (see Daily GPI, Aug. 11 ). However, Larry LeBlanc said this week that while the company had not made a final decision to proceed, it is finalizing a well location so that it “would be in a position to start drilling this fall.”

According to the company, the second test well would be located near the recently drilled Margaree well, which is located about 250 kilometers southeast of Halifax. The Margaree well is rumored to be a strong natural gas discovery for EnCana, although the company would not comment on specifics. The Margaree F-70 well spudded on May 21 using the Rowan Gorilla V jack-up, and drilled to a depth of 3,677 meters.

Last year, EnCana filed a Development Plan Application for Deep Panuke with the Canada-Nova Scotia Offshore Petroleum Board (CNSOPB), estimating the East Coast field could produce 400 MMcf/d for 10 years. However, earlier this year, EnCana asked Canadian and provincial regulators for a one-year “time-out” adjournment of the regulatory proceedings (see Daily GPI, Feb. 18 ). CEO Gwyn Morgan cited concerns about the C$1.1 billion initial offshore development plan, which was crafted when Deep Panuke was discovered by EnCana’s predecessor company PanCanadian.

The regulatory process for Deep Panuke was officially adjourned by regulators, and EnCana’s project team has been re-evaluating development options for the project. EnCana is required to report to the National Energy Board and the CNSOPB on the project’s status by Dec. 10, 2003.

Deep Panuke is located in a porous carbonate reservoir 3,400 to 3,600 meters below the sea floor, approximately 175 kilometers offshore from Goldboro, NS and 250 kilometers southeast of Halifax on the Scotian Shelf. The gas pool was discovered in 1998 and additional drilling in 1999 and 2000 confirmed the presence of a significant gas accumulation. According to EnCana, Deep Panuke natural gas is very lean (with low volumes of associated gas liquids) and slightly sour.

Meanwhile, El Paso said Thursday that most of its environmental studies and engineering plans are completed for a proposed Scotian pipe into Northeast U.S. markets, but said it would wait to proceed until more natural gas is discovered in the region. In late 2001, El Paso proposed building a 36-to-42-inch pipe, which could have been in operation between 2005-2006 under a four-year approval process..

However, spokesman Aaron Woods said that while the company had been “optimistic” that more gas would be discovered by now, “that has not happened.”

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