The 800-mile Maritimes & Northeast Pipeline took the stagelast week, but its supporting cast, the Sable Offshore EnergyProject, couldn’t make the show. After running the regulatory andpolitical gauntlet north of the border, the pipeline has been lefthanging by producers, who are more than a week away from initialdeliveries.

Maritimes’ spokesman John Sheridan had a tough time explaininghow a pipeline could be in service without actually delivering anygas. “Well, what it means,” he said, “is that we’ve been given allthe necessary approvals on both the Canadian and U.S. side, andthat gas from the producers should be flowing within the next fewweeks. What it means is that the shippers began incurring theirdemand charges under their firm service agreements. They’re payingfor their capacity since we’re in-service whether or not the gas ismoving. That’s what that means,” he explained.

A spokesman for Maritimes shipper Boston Gas, which has been avocal protester in numerous Maritimes rate proceedings, said latelast week the company is willing to sit back and wait for first gasat least for a few days.

This delay is only the latest in a long series. Maritimesofficials delayed the project a year because of uncertainty aboutthe New England market. The project recently was held up by thecourts at the eleventh hour because of an Indian dispute. It’s NEBcertificate is under review again by Canadian regulators. Theproject also was put under the gun by FERC. And the current disputewith the Nova Scotia Indians could draw more political attentionpotentially causing further delay (see related story this issue).

After a rush to complete construction of the billion dollar-pluspipeline in November, a Canadian court halted the project a fewweeks ago on a tribal lands issue and had the National Energy Board(NEB) reopen the proceeding. Pipeline officials hadn’t come to anagreement with tribal interests in Nova Scotia over how the projectwould be monitored in certain Indian territory. The Indians haveworked hard to derail the project, demanding some monetarycompensation for their troubles and the pipeline work beingconducted in their territory.

But that dispute apparently is closer to resolution now thatMaritimes has been forced back to the negotiating table by thecourt. In return for Maritimes’ good faith negotiations, last weekthe NEB allowed the pipeline to begin operations in anticipation ofa settlement between the Union of Nova Scotia Indians and thepipeline. Just before Thanksgiving Day, Maritimes sponsors hadfiled a request with FERC for an extension of its in-service dateuntil Jan. 1 in case the Canadian approval was delayed. As itturned out, the interim approval by the NEB allowed Maritimes towithdraw its request for another extension.

Despite the last minute NEB authorization, however, SableOffshore Energy Project (SOEP) producers weren’t quite ready toopen wellhead valves. It will be another week or more before finaltests are completed and first production begins to flow, and itprobably will be mid-January before the pipeline is full, saidSable spokeswoman Cynthia Langlands.

“At the moment we have successfully tested five of our six wellsthat we’ll have up and running for first gas. Probably within thenext 10 days or so we will see first gas at our central processingplatform offshore…, and then from there it will travel to ourGoldboro plant. We’ll do some commissioning at Goldboro, and thensend [gas] to the Maritimes & Northeast line shortly afterthat. Our plan is to have two wells up and running in 10 days. Thisis not cast in stone, but a week later we would likely see anotherwell and then the other wells maybe two or three weeks after that.That’s the ramping up. It probably will take a month to bring upall six wells.”

She said Sable producers expect to be flowing 450 MMcf/d, ofwhich 360 MMcf/d goes to the U.S., by mid-January, increasing togreater than 500 MMcf/d when proposed Nova Scotia laterals arein-service in November 2000.

“It has been a long road. We have accomplished a lot in 23months,” she said regarding SOEP. “We’re now just doing the finalcommissioning and testing. We did have three main hurricanes comethrough in the fall, and I think all the attention and detail wehave been focusing on the commissioning and testing process [hasextended the delay]. There are a lot of facilities.

“We’re just talking a difference of a few weeks from what weoriginally targeted two or three years ago,” she said, overlookingthe fact that the Maritimes Phase II project was delayed by oneyear. But she said there was no one thing holding up production.”It’s just the size and scale of the project.”

Meanwhile, however, Maritimes is left holding the bag. “We’reessentially in stand-by,” said Maritimes spokeswoman KristaJenkins. The U.S. will have to wait a little longer to receive thefirst package of gas production ever from an offshore Atlanticfield.

Rocco Canonica

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