Offshore field promising - Duke EnergyThursday, November 13, 2003
Offshore field promising
By CP
Positive results at two wells near EnCana's Deep Panuke project near Sable Island give Canada's largest energy company "further comfort" to proceed with the $1.3-billion offshore gas development, says Duke Energy, whose pipeline would carry the gas.
Yesterday's comments from U.S.-based Duke was the most positive indication to date that Calgary-based EnCana will make Deep Panuke a going concern again, after putting the project on hold in February.
Tom O'Connor, president of Duke's gas transmission business, told an industry conference in Toronto that while Deep Panuke and the whole East Coast natural gas basin has had "fits and starts," expectations remain high.
"Recently, they've completed two successful wells at Margaree and MarCoh and it appears to have given EnCana further comfort that this is a reserve that can be developed and brought to market," O'Connor said.
"So we will work with EnCana going forward to figure out how to expand the pipeline in the most economic fashion and move that gas into markets in Atlantic Canada as well as the U.S. Northeast."
Karen Taylor, a pipeline analyst with BMO Nesbitt Burns in Toronto, said it wasn't a big surprise that Duke was so "favourably inclined" to the offshore east coast.
"They have infrastructure in the region," she said, but cautioned that the area is still relatively unexplored. "The future may not be as clear as he thinks or perhaps as the producers think."
EnCana said in February it would take a time out from the regulatory approval process for Deep Panuke in the hope that new discoveries and lower costs would improve the economics of the development.
EnCana president Gwyn Morgan has said the company plans to update federal and provincial regulators on Dec. 10.
Morgan has also suggested he will be looking for help from regulators before giving the green light.
"If this project begins to move forward again, we're still looking for some streamlining and some action on the regulatory process on the East Coast," Morgan said last month while unveiling third-quarter profits of $400 million -- up nearly 100% from 2002.
"And I think that will be another important factor in our decision."
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