PanCanadian Signs Gas Transportation Agreement

PanCanadian Petroleum Limited reached a significant milestone in the development of its Deep Panuke natural gas field with the signing of a firm service agreement with Halifax-based Maritimes & Northeast Pipeline (M&NP). The agreement allows PanCanadian to transport up to 400 million cubic feet of natural gas per day on the M&NP pipeline for 10 years. The contract is contingent upon a number of factors related to timing, construction of facilities, and regulatory approvals.

Natural gas from the $1 billion offshore development will be piped to shore where it will connect with M&NP's mainline at Goldboro, Nova Scotia. The 1,051-kilometre pipeline crosses the Canada/U.S. border in New Brunswick and terminates in Dracut, Massachusetts. Production from Deep Panuke is expected to begin in the first quarter of 2005.

Deep Panuke is located 155 miles southeast of Halifax, Nova Scotia. Since 1999, PanCanadian has drilled four wells in the field, each of which tested at rates in excess of 50 million cubic feet of natural gas per day. PanCanadian has a 100 percent interest in the Deep Panuke development.