Worth the wait: Despite a delay in first gas, Deep Panuke has its benefitsBy: Ryan Van Horne
Benefits and spinoffs
While Deep Panuke still hasn’t produced first gas, communities and businesses in Nova Scotia have done well with the project
By Ryan Van Horne
Deep Panuke is unlikely to provide Nova Scotia with bountiful royalties like the Sable Offshore Energy Project (SOEP) did.
That said, Encana's natural gas play southwest of Sable Island has been a benefit to Nova Scotia's economy.
Deep Panuke will flow less gas than Sable, and there are other factors at play, but natural gas is at a low ebb in terms of price – about a third of the peak it hit during the Sable heyday.
“These two projects vary significantly in size over differing production periods with differing production volumes, gas prices, foreign exchange rates, transportation costs, capital costs and operating costs,” said Energy Minister Charlie Parker. “It is not appropriate to compare the projects based on production volumes and gas prices alone. That being said, the Sable Offshore Energy Project has had the benefit of high gas prices matching some of its peak production years.”
Parker said the offshore petroleum industry is a good source of jobs and revenue for Nova Scotia. Deep Panuke is still a valuable project —despite the expected lower royalties. “All Nova Scotians benefit from offshore activity and the jobs and investment it brings,” Parker said.
There are many benefits and spinoffs from Deep Panuke. When Encana and the province signed the Offshore Strategic Energy Agreement (OSEA) in 2006, it included a commitment from both to provide opportunities for employment and training.
A program designed to fulfill that goal was the Developing Skills Initiative, which provided opportunities for 10 Nova Scotia graduates to start their careers with Encana or with contractors working on Deep Panuke.
One of the successful candidates was Scott Allan of Halifax, who received his certificate in applied science from Acadia and then graduated from Dalhousie with a degree in mechanical engineering before joining Encana in November 2008.
He quickly realized he was there to work and learn–and that he was not there just because Encana had to hire him.
"I can see where you would be interested to know if it was just an exercise for Encana to hire on some people to shuffle papers,” Allan said. “I was a little bit hesitant of that myself.”
But Allan says Encana was committed to making sure that everybody did important work and learned from their experience.
“While we were there, they made sure to involve us in everything they possibly could within our field,” Allan said.
“Coming out of school, you don't feel like there's much you can really add, but the way that this project went, there was quite a few people managing quite a large workload.”
Allan had a lot of responsibility although he thought it was a “bit daunting,” at times, he appreciated the value in that.
“That's what you want and that's how you learn quickly,” he said. “That's part of the reason I was able to capitalize on those two years of experience.”
Encana allocated money and time to the trainees to make sure they got the career guidance they needed while Allan and the other engineers were keen to tap into the wealth of knowledge and experience of Encana's veteran staff.
Working for Encana helped Allan choose his career path and get a job with the Halifax office of Welaptega Marine Ltd. As a business development engineer with Welaptega Marine Ltd., Allan is working for a smaller company, but gets a broad range of experience soliciting clients at oil and gas hubs around the world. He also gets to travel wherever Welaptega offers its specialty -- offshore inspection services for floating production assets.
“It gets pretty tight to provide all these project with personnel resources,” Allan said. “I'm always jumping back and forth between the different job requirements.”
With many of Nova Scotia's university graduates leaving for jobs in other provinces, Allan says the value of the developing skills initiative cannot be overstated. “It's great to see a company offer up those opportunities to study here or to live here,” he said.
Deep Panuke has also been a boon to Guysborough County, where Encana's 173-kilometre pipeline makes landfall in Goldboro and hooks into the Maritimes and Northeast Pipeline. “We're very pleased to have a client like Encana,” said Guysborough County Warden Lloyd Hines.
Encana has fewer assets onshore in Goldboro than Sable because Deep Panuke gas is processed offshore, but they still pay “tens of thousands” in taxes, Hines said. “That gives us more revenue to do our core business and to grow our community.”
A few people who got their start in the offshore industry with Sable and worked around the world are returning home to work on Deep Panuke. “Now, they're 200 kilometres from home and get to see their families a lot more often,” Hines said.
When the production facility came from Abu Dhabi, it was towed into Mulgrave for two weeks and transformed the town while it was modified to meet Canadian standards. “There were 600 or 700 people a day working on it and that brought quite a bit of economy active to the area,” Hines said.
Mulgrave will continue to be a supply base for Deep Panuke while other work around the northeast part of Nova Scotia has provided jobs in the region. “People are prepared to travel,” Hines said. “If you've got to commute 45 minutes or an hour these days for a decent job, people do it.”
Stephen Rankin, Director, External Relations for Maritimes and Northeast Pipeline, said Deep Panuke will help fulfill demand in the local natural gas market which has grown to 250,000 MMBTU per day, Rankin said.
“That roughly matches up to where we've seen production from offshore now,” he said. “As we work to convert more industrial and residential customers and commercial customers to natural gas, it's reassuring that there will be another source of gas domestically.”