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Husky eyes Newfoundland gas from White Rose within a decade
Gary Park Petroleum News Calgary correspondent
Husky Energy is taking one of the boldest steps yet to exploit offshore Newfoundland’s natural gas potential.
The Canadian integrated, which is operator of the White Rose oil field, is now exploring the viability of producing and transporting gas from the same field.
It has invited expressions of interest from contractors and engineering firms to weigh the key technical, economic and regulatory issues essential to a safe and reliable gas development on the Grand Banks, as well as the capital and operating costs of such a development.
Following a review of the responses, Husky said it may select one or more firms to participate in a request for proposal process. The Canada-Newfoundland Offshore Petroleum Board has estimated that White Rose has gas resources of 2.7 trillion cubic feet, while the entire offshore Newfoundland and Labrador region is rated at 9.6 tcf.
But to date developing the gas has been relegated to second place behind oil because of the costs of getting the gas to market.
Husky President and Chief Executive Officer John Lau said in a statement June 1 that the Husky evaluation is “the first step which may help realize gas production from White Rose within a decade.
“In order to evaluate natural gas development in the Jeanne d’Arc basin (which contains the Hibernia and Terra Nova oil-producing projects as well as White Rose, which is due on stream by late 2005 or early 2006) new technologies will need to be developed and today we believe this is possible,” he said.
Husky owns 72.5 percent of the White Rose development, with Petro-Canada holding the remaining 27.5 percent. The oil venture carries a price tag of C$2.35 billion. Compressed or pressurized natural gas has potential Husky said its initial assessment indicates that a marine transportation system using compressed natural gas/pressurized natural gas has potential as a commercial venture. But the company wants to consider other technologies and is inviting proposals that delve into those prospects.
The program will include:
• A quantified evaluation of viable alternatives and a methodical selection process to identify a preferred development option. This will include identification of potential opportunities for activities that could be carried out in Newfoundland and Labrador and elsewhere in Canada.
• A capital and operating cost estimate for each option.
• An evaluation of any unproven technology issues and operating procedures, including proposed work programs, testing to address these uncertainties and an estimate of the development time and costs required.
• An estimate of system operations based on simulation modeling including reliability and weather related factors.
• Identification and quantification of safety and environmental related issues and risk factors.
• An evaluation of regulatory issues during all stages of the gas development, including national and international regulations, protocols and codes.
Husky has set a June 30 deadline for expressions of interest.
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