Deep Panuke gas project gets nod from regulators

A $700-million offshore natural gas proposal has cleared its final regulatory hurdle, paving the way for a development that would bring hundreds of jobs and millions of dollars in royalties to Nova Scotia.

Premier Rodney MacDonald made the long-awaited announcement Wednesday.

"For a few years, momentum appeared to be in short supply in our offshore. I'm here today to say times are changing," MacDonaldsaid at an energy conference in Halifax.

He said the provincial and federal governments accepted EnCana Corp.'s development plan and benefits plan report, which had been approved by the Canada-Nova Scotia Offshore Petroleum Board, MacDonald said.

EnCana wants to export 300,000 million cubic feet of natural gas per day from the Deep Panuke gas field starting in 2010. The 13-year project is expected to create 250 full-time jobs.

The company'splan is a scaled-back version of what it first proposed for the gas field about 250 kilometres southeast of Halifax. In 2003, EnCanashelvedthe project, saying it wasn't economically feasible.

EnCana's board of directors will meet on Oct. 24 to decide whether to spend the money to proceed with the project.

Even after spending four years and hundreds of millions of dollars on it, Dave Kopperson, EnCana's Atlantic vice-president, said he still does not know what the board will do.

"They've been given some brief updates," he said, "but the final economics for the project, that will be the first time they see it."

Kopperson said part of the discussion will be whether to spend $200 million building a second pipeline to bring natural gas ashore, or rent space on the existing Sable pipeline owned by Exxon Mobil.

If the EnCana board agrees, Deep Panuke will be Nova Scotia's second offshore gasdevelopment since Sable Island eight years ago.

On the TSX, shares of EnCana fell $1.07 to end at $61.45.