Deep Panuke gas production 'on track' for June

The Dutch company hired to build, commission and operate the Deep Panuke offshore natural gas production facility says the project is "on track" to produce its first natural gas before the end of June.

In a news release issued Thursday morning from Amsterdam, SBM Offshore said it had fully repaid its $221-million US Deep Panuke loan.

"The MOPU's path to production continues on track," said the statement, referring to the mobile offshore production unit.

"Commissioning is currently proceeding and production is expected to commence before end June 2013."

SBM Offshore is building, commissioning and operating the natural gas platform for Calgary-based Encana.

The natural gas production facility is more than two years late and is hundreds of millions of dollars over the original forecast.

Encana and SBM are currently locked in a court battle, blaming each other for Deep Panuke's lengthy production delays.

The platform was in the process of final commissioning when an electrical fire broke out in January and 46 people were flown back to shore as a precautionary measure.

Encana said at the time that it did not expect its schedule would be delayed by the fire, which was contained to an electrical cabinet in the emergency switchboard room.

The Deep Panuke project received regulatory approval in 2007 and was initially supposed to go into production by late 2010. But last fall, SBM Offshore said Deep Panuke wouldn't start producing natural gas until at least June 30, 2013.

The gas field is about 250 kilometres southeast of Halifax on the Scotian shelf.