EnCana: Deal Is a ‘First Step’ Toward Jump-Start of Deep Panuke
EnCana Corp. and the province of Nova Scotia have reached an offshore strategic energy agreement (OSEA) that establishes the framework for the potential development of the Deep Panuke natural gas field located roughly 250 kilometers southeast of Halifax, off Canada's East Coast.
"This is a very good first step in restarting the development of the Deep Panuke gas field. We are pleased to have established a framework with the province for royalties, employment, and industrial benefits, plus funding for research and education,” said Dave Kopperson, EnCana's vice president for Atlantic Canada. “However, we have plenty more work to do to make Deep Panuke production a reality. For Deep Panuke to go forward, it will take the constructive efforts of all parties involved as we seek regulatory approval, tender the work, and consider this major investment decision.”
Over the past 3 years, EnCana has continued to assess Deep Panuke's resource potential as it developed a new plan to make the project as economic as possible. A key component of that work is the OSEA, which outlines commitments to provide specific industrial and employment opportunities in Nova Scotia, plus establishes a royalty framework that clarifies the opportunity for the owners to earn a fair return, and for Nova Scotia to generate substantial economic activity and benefits.
As a next step, EnCana is preparing to file a Deep Panuke project description this summer with the Canadian Environmental Assessment Agency and a development plan application later this year with the Canada-Nova Scotia Offshore Petroleum Board. Details on the project's estimated size, reserves, production volumes, schedule, facilities, and capital cost are expected to be included in the regulatory applications.
EnCana concluded that bringing Deep Panuke to reality requires a timely and favorable review of the regulatory application, attractive market conditions, and funding approval by its board—a decision that may be considered by the end of 2007.
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