Monday, January 29, 2007

5 Top Stories of 2006 in ABM - 3 of 4

This is the next is the series of the 5 top stories of the year as published in the January-February issue of the Atlantic Business Magazine.


Deep Panuke - Finally Moving

On June 30, 2006 Nova Scotia Premier Rodney MacDonald announced that the stalled Deep Panuke natural gas project was moving forward.

Deep Panuke first emerged as a potential third project for the Nova Scotia offshore in 2000, when PanCanadian Energy announced encouraging drilling results from a natural gas field associated with the Cohasset Panuke oil project. Deep Panuke will tap into the natural gas reservoirs located underneath the original Cohasset-Panuke oil field, which ceased production in late 1999.

The Offshore Strategic Energy Agreement (OSEA) announced by Premier MacDonald is the first step in the process to get both gas and opportunities flowing to the province.

To start, EnCana has guaranteed 1.34 million person-hours of work in Nova Scotia, including at least 850,000 by Nova Scotians. The agreement also contains a commitment to build accommodation facilities for the Offshore Production Unit in the province yielding some 280,000 person-hours for Nova Scotians.

The Deep Panuke OSEA contains a unique element that will facilitate long-term opportunities for Nova Scotia companies: EnCana will provide financial and human resources to help build an onshore drilling rig manufacturing operation in Nova Scotia - $1 million dollars worth per rig towards the construction of five onshore rigs in-province.

Nova Scotia companies who participate in this ambitious and creative supplier development initiative will acquire experience and an entrée into a market hungry for qualified labour and industrial capacity. Construction of the proposed initial five rigs could also help alleviate the rig shortage that has hindered the onshore industry in Atlantic Canada and across the country.

But rig construction is likely to be just the beginning of long-term benefit emerging from the Deep Panuke OSEA. Premier MacDonald expects joint ventures and partnerships established during project development to establish export capacity and help Nova Scotia’s resident industry flourish.

Premier MacDonald says the deal was reached through patience, cooperative spirit and an eye to the future: "(By) staying at the negotiating table and showing certainty to the company during the regulatory process, Nova Scotia demonstrated it is a steady partner that’s open for business and will find ways to make projects move forward."

The mood in Nova Scotia is confident, the supply and service sector is ready, and the industry is looking forward to success beyond the life of this new project.

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