Sable gas project tied to timely pipeline nod

The $3 billion (Canadian) Sable Island gas development in the Grand Banks area off Nova Scotia and related pipeline project will be put on hold unless the pipeline is approved soon, says lead partner Mobil Canada Ltd. Mobil Canada Pres. Jerry Anderson said his company cannot afford to spend more than $2 billion to develop the offshore fields without certainty on a pipeline. He said the level of risk in the schedule has gone up significantly.

Oct. 27, 1997

3 min read

Mobil Canada Pres. Jerry Anderson said his company cannot afford to spend more than $2 billion to develop the offshore fields without certainty on a pipeline. He said the level of risk in the schedule has gone up significantly.

Mobil and partners have applied to develop six gas fields off Sable Island and are partners in a proposed $1 billion pipeline via Nova Scotia and New Brunswick to New England markets.

Hearings on that project were held earlier this year. Two other groups have asked regulators to delay a decision on the pipeline until their applications are heard.

Differing views

Nova Scotia Economic Development Minister Manning MacDonald says he wants all proposals to be heard and does not consider that an unreasonable delay.

Mobil said its project will be put on hold unless the pipeline is approved in conjunction with the offshore development project.

Anderson said that if there is a significant delay, gas will not reach the Boston market by the target date of November 1999. He said the group also has to start spending large amounts of money early in 1998 and cannot do this without the certainty of an economic pipeline to move gas to markets.

Don Cayo, an analyst with the business-oriented Atlantic Institute for Market Studies, said Mobil is serious that it will put the project on hold if regulatory approvals are delayed.

Competitors

Rival TransMaritime Pipeline has proposed a line through Nova Scotia and New Brunswick to Quebec and from there on to New England.

It has filed an application and is awaiting a hearing date from Canada's National Energy Board. The question of whether a proposed line goes through Quebec is a political issue in Canada, with Ottawa apparently supporting that option.

A third group, North Atlantic Pipeline Partners (NAPP), proposes a 2,500-km subsea gas pipeline from the Grand Banks area to markets in Atlantic Canada and New England. NAPP also recently filed with NEB for approval.

The NAPP pipeline would commence at Country Harbour, N.S., and reach landfall in Halifax, N.S., and Seabrook, N.H. The 925-km, 42-in. first phase would connect Sable Island gas reserves with customers in eastern Canada and northeastern U.S. It claims market commitments from nonaffiliated customers totaling more than 250 MMcfd.

Two subsequent phases are planned for NAPP, both of 36-in. diameter, that would extend the system into Newfoundland and across the Laurentian Channel.