EnCana has asked federal and provincial regulators for a "time out" in the regulatory approval process for the Deep Panuke gas project offshore Nova Scotia.
"Many things have changed since we first designed the Deep Panuke project. We want to capitalize on all possible opportunities by examining every aspect of the project to improve its fundamental economics," said Gwyn Morgan, EnCana's president and CEO.
EnCana has concerns that the initial development plan may not be the most appropriate fit for the current state of gas development in the region. Discovery of known reserves from the offshore Nova Scotia basin is comparatively modest to date, but exploration is at a relatively early stage.
Long-term commitments to expanded transportation infrastructure depend upon future exploration success of EnCana and several other companies with numerous promising exploration prospects to drill. The delay announced today will allow a more complete examination of overall market options in the Maritime region.
"This pause in the process also provides industry with extra time to discover more commercial reserves. We have additional exploration drilling planned this year for the Scotian Shelf." Morgan said.
"We are looking to make Deep Panuke a better project, one that provides strong, sustainable financial returns over a longer period of time. The project at this juncture of the regulatory process would provide an insufficient risk-adjusted return in the context of EnCana's other investment opportunities," Morgan said.
EnCana has requested an adjournment of the regulatory approval process from the Canada-Nova Scotia Offshore Petroleum Board and the National Energy Board. EnCana expects to be able to apprise regulators of the planned enhancements for the Deep Panuke project by the end of 2003.