With all regulatory approvals in place at both Federal andProvincial levels, sponsors of the Sable Island Offshore EnergyProject last week signed both their key commercial agreements andthe Facilities Alliance Agreement to engineer, construct andinstall production and gathering facilities to handle delivery of 3.5 Tcf of gas from offshore Nova Scotia. This formally commits theowners to the $2 billion first phase, which will deliver the firstgas in late 1999.
“Today marks the most important step taken in the history of ourindustry in Nova Scotia,” Mobil Oil Canada president Jerry Andersonsaid at the official launch last Wednesday. “We have formally setin motion the engineering, procurement, construction andinstallation of the first phase to produce gas from the Venture,North Triumph and Thebaud fields.
“And we’re putting down roots here as we establish a newcompany, Sable Offshore Energy Incorporated (SOE Inc.), based inHalifax, to manage the project and oversee operations through itslife,” Anderson said.
John Brannan, currently Mobil Oil Canada’s well operationsmanager, will become general manager of SOE Inc. and Lynn Zeidlerof Shell Canada will continue as Tier 1 (first phase)implementation manager. They will be responsible for day-to-daymanagement of the project and will report to the owners through theSOE Management Committee.
The project Facilities Alliance Agreement, signed today,formalizes the previously announced alliance among the sevencompanies [Allseas Canada Ltd., BBA, Elsag Bailey (Canada) Inc.,Kvaerner Oil and Gas Ltd, MMIndustra/BrownandRoot Joint Venture,Saipem UK Ltd., and AGRA Monenco/BrownandRoot Joint Venture] tocarry out the engineering, procurement, construction andinstallaton of the facilities.
“We have a very tight program to achieve the promised target ofgas-to-market in late 1999. That’s when we have told our customersthey can expect gas and that’s when we intend to get it to them.From today, we have 22 months in which to build the first phase.The main Thebaud platform will take an estimated 17 months to buildand place. Our critical path flows from that schedule,” Andersonsaid.
All the owners paid tribute to the support received in NovaScotia and Canada generally in the past three years. “Without thissupport, we would not be here today confirming the largest singleinvestment in Nova Scotia’s history,” Anderson added. “We are nowin an exciting phase. A lot will happen in the next six months.Nova Scotia has already started to feel the effects of having anaverage of one million dollars a day being pumped into the economy. This will continue over the next two years.”
The owners said the 1996 and 1997 3D seismic programs wereshowing greater reserve potential than initial estimates. Beyondthe 3.5 Tcf to be tapped in the current project, the GeologicalSurvey of Canada predicts the Shelf probably contains at least afurther 13 Tcf of recoverable gas.
The SOE owners are: Mobil Oil Canada, 50.8%; Shell Canada,31.3%; Imperial Oil, 9%; Nova Scotia Resources 8.4%; MosbacherOperating. 0.5%.
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