(NGI’s Daily Gas Price Index – August 5, 2013) Deep Panuke's NatGas Supplies Might Find Opening in New England
Encana Corp. was given the green light on Friday to start up the long-awaited Deep Panuke natural gas project offshore Nova Scotia.
The Canada-Nova Scotia Offshore Petroleum Board issued the operations authorization, which allows Encana to begin flowing gas from the reservoir to a production field center installed offshore. Ultimately, the center would transport gas to onshore markets.
The OK was authorized after the board completed an extensive "readiness for operations review" when Encana reported that the facilities were fit for purpose and personnel were properly trained. The certifying authority, Lloyd's Register, also issued a certificate of fitness certifying that the facilities could be operated safely without polluting the environment, and are in compliance with the regulations.
Analyst Housley Carr of RBN Energy LLC recently said if the project had started up as originally planned three years ago, it might have gained a "strong foothold" in New England. The question now is, "can the new gas...push its way into New England, or will the coming influx of Marcellus gas into the six-state region push Deep Panuke gas back across the border [see related story]?" He thinks Panuke may find an opening.
Spain's Repsol YPF SA in 2009 contracted to buy all of the 300 MMcf/d of Panuke gas for the life of the project (see Daily GPI, Feb. 18, 2009). Repsol also owns 75% of the New Brunswick Canaport liquefied natural gas (LNG) terminal in Saint John (Irving Oil owns the remaining stake) and the terminal "has the capacity to produce up to 1.2 Bcf/d from LNG but which has been operating at much lower levels because gas prices in North America are much lower than in Asia and Europe, discouraging imports [see Daily GPI, Feb. 27]," Carr said.
The Sable gas and gas converted to LNG at Canaport flow through Canada's portion of the Maritimes & Northeast Pipeline; 800 MMcf/d also flows south to Maine, "where it merges with the Portland Natural Gas Transmission System pipeline to form a joint, 100-mile, 600 MMcf/d pipeline through southern New Hampshire to Dracut, in northeastern Massachusetts," he said.
