Encana hires SBM Offshore to operate Deep Panuke gas platform

CALGARY, Alberta Tue Dec 17, 2013 5:40pm EST

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CALGARY, Alberta Dec 17 (Reuters) - Encana Corp, Canada's largest natural gas producer, said on Tuesday it has hired marine services company SBM Offshore to operate the Deep Panuke platform off the coast of Nova Scotia.

The platform is designed to produce up to 300 million cubic feet of natural gas per day from four wells in the Deep Panuke field, approximately 155 miles (250 kilometres) southeast of Halifax, Nova Scotia.

Encana chief operating officer Mike McAllister said the agreement with SBM Offshore, known as a production acceptance notice, was a major milestone for the delayed project. It was originally expected to start producing in the fourth quarter of 2010.

SBM Offshore owns and operates the platform on Encana's behalf and the acceptance means the platform is now producing as agreed upon, Encana spokesman Jay Averill said.

Encana will sell 100 percent of gas output from Deep Panuke project offshore Nova Scotia to Spain's Repsol, as agreed in 2009.

Pricing will be tied to the U.S. northeast market. Natural gas from the project is processed offshore and transported via subsea pipeline to Goldboro, Nova Scotia, where it interconnects with the Maritimes and Northeast Pipeline.

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