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Nova Scotia project shuttered
Gary Park for Petroleum News
The shaky history of commercial production from Atlantic Canada’s offshore natural gas fields quietly slipped into the history books on Dec. 31 when ExxonMobil permanently stopped production at the Sable Offshore Energy Project.
The culminated a 20-year production life marked by missed targets, increasing water production, and accelerated decommissioning plans.
The project, about 180 miles southeast of Halifax, Nova Scotia, shipped the bulk of its gas through the Maritimes & Northeast Pipeline to New England, but never came close to capacity of 600 million cubic feet per day.
The peak output was 530 million cubic feet per day in 2002, before sliding to 366 million cubic feet per day in 2006, with ExxonMobil conceding in 2012 had fallen to 65 percent of normal levels.
By then ExxonMobil had abandoned any hopes of meeting the originally targeted 25-year lifespan.
SOEP was estimated to contain sales gas reserves of 3.5 trillion cubic feet, but that were rapidly scaled back to 970 billion cubic feet from four fields from 16 wells, while water production increased at twice the rate that natural gas production was decreasing.
Success for Nova Scotia Regardless of the setbacks, Nova Scotia’s Energy and Mines Minister Derek Mombourguette rated the SOEP as an economic and employment success.
His government said it received nearly C$4 billion in taxes, while the project invested tens of millions of additional dollars in local research, training and education for young people.
Ray Ritcey, chief executive officer of the Maritimes Energy Association, said the story of the SOEP was one about the “people involved in the project,” many of whom developed significant careers to support their families and communities, some of them taking that expertise to global ventures.
Larry Hughes, an engineering professor at Dalhousie University, told Global News the SOEP “proved far more complex than what was expected ... by 2010, the writing was on the wall, and Sable was in decline.”
Robin Tress of the Council of Canadians wondered how much government royalty money would go towards decommissioning the project.
“The fact that we’re on the hook for the decommissioning costs of Sable shows again that (the Canada-Nova Scotia Offshore Petroleum Board) that is supposed to govern and regulate offshore drilling is doing so in favor of the industry and not the people of Nova Scotia.”
The Nova Scotia government said the decommissioning costs, expected to last through 2019, will be paid by ExxonMobil, deducted from the royalties it owes, but those numbers will not be made public.
- GARY PARK
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