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Compressed natural gas Newfoundland’s hope Husky Energy considering CNG to commercialize offshore gas; also considering sub-sea pipeline, LNG and methanol conversion Gary Park Petroleum News Canadian Correspondent
Husky Energy has dangled the prospect of using compressed natural gas technology to commercialize Newfoundland’s offshore gas resources for domestic and U.S. consumption.
Now engaged in negotiations with the province on a royalty regime, Husky believes the focus on Newfoundland’s Grand Banks is on the verge of shifting from oil to gas.
The only sticking point is settling on a means of delivering the gas to market, Chris Laing, Husky’s manager of East Coast gas, told an international forum on CNG.
Answering his own question, Laing said Husky’s White Rose oil field, due to start production late this year, “could be one of the first projects to adopt CNG tanker.”
White Rose has an estimated 2.7 trillion cubic feet of gas reserves, with another 1.3 tcf in the Hibernia and 500 million cubic feet in Terra Nova — the three oil projects in the Jeanne d’Arc Basin.
In addition, the Labrador Shelf could hold 4.2 tcf — all part of a potential 50 tcf in the Newfoundland offshore.
Husky is at the leading edge of promoting gas development, having attracted response from more than 40 groups a year ago to its invitation for “expressions of interest” from contractors and engineering firms to examine the technical, economic and regulatory issues associated with the safe and reliable shipment of gas from White Rose.
Although conceding there are still significant technological challenges, Laing said CNG is the front runner. Pipeline, LNG, methanol also in running However, Husky is still considering a sub-sea pipeline, liquefied natural gas or methanol conversion.
Alf-Petter Olsen, general manager of Norway’s CETech, said the key for his company, which is involved with Vancouver’s Teekay Shipping in a CNG venture, is to “find the right project.”
Other promoters of Newfoundland gas said the Canadian government must put a regulatory and royalty regime in place so that Newfoundland is ready to take advantage of CNG technology.
Husky Chief Executive Officer John Lau, a supporter of CNG, predicts it will take 10 years to develop a White Rose gas project.
Jim Wright, director of the Center for Marine Compressed Natural Gas at Newfoundland’s Memorial University, believes there will be a breakthrough this decade that allows CNG vessels to transport gas from previously inaccessible fields.
He has urged the Canadian and Newfoundland governments to fast track the necessary regulations and guidelines or risk falling behind other nations.
Newfoundland Environment Minister Tom Osborne said his government is increasingly optimistic that it will “produce gas sooner rather than later.”
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