EnCana reviewing Deep Panuke gas project, request delay in regulatory process

Feb. 14, 2003
EnCana Corp. is reviewing its Deep Panuke natural gas project and has asked Canada's National Energy Board and the Canada-Nova Scotia Offshore Petroleum Board for a "time out" in the approval process.

By OGJ editors

HOUSTON, Feb. 14 -- EnCana Corp. is reviewing its Deep Panuke natural gas project and has asked Canada's National Energy Board and the Canada-Nova Scotia Offshore Petroleum Board for a "time out" in the regulatory approval process.

EnCana requested an adjournment of the regulatory process, saying it expects to be able to update regulators as to its progress on the Deep Panuke project review by the end of 2003.

Deep Panuke, which underlies Panuke-Cohasset oil field, is the second major gas development on the Scotian shelf, following the Sable Island area gas fields development that went on stream in late 1999. Deep Panuke, 250 km east of Halifax, NS, is estimated to hold 1 tcf of gas (OGJ, Mar. 18, 2002, p. 8).

Saying it wants to strengthen the anticipated project economics, EnCana Friday expressed concerns that its initial development plan might not be the most appropriate fit for regional gas development. Discovery of known reserves from the basin is comparatively modest, and exploration is at a relatively early stage, the company said.

"Long term commitments to expanded transportation infrastructure depend upon future exploration success of EnCana and several other companies with numerous promising exploration prospects to drill. In addition, EnCana has recently entered into a conditional term sheet concerning the supply of part of Deep Panuke's production to a project in Prince Edward Island. This delay will allow a more complete examination of overall market options in the Maritime region," an EnCana release said.

EnCana Pres. and CEO Gwyn Morgan said, "Many things have changed since we first designed the Deep Panuke project. The East Coast natural gas industry is young and evolving, with promising new opportunities emerging, such as the potential to utilize existing transportation capacity on the established pipeline and to serve expanding gas markets."

"Successful advancement of the project continues to require the clear support and commitment of all key stakeholders," he added. "The Deep Panuke project will require all stakeholders to work together to find ways to help ensure its feasibility and recognize its substantial positive impact on the region," Morgan said.