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Deep Panuke a step closer to starting flow of natural gas

The Canada-Nova Scotia Offshore Petroleum Board has given Encana Corp. the green light to start the flow of natural gas from the Deep Panuke offshore natural gas project.

In a statement Friday, the federal-provincial regulator said the Calgary-based energy giant can begin shipping gas to its production field centre offshore and ultimately to market.

The board said it issued the authorization after reviewing the company's readiness for operations and receiving assurances that the facilities are suited for the work and personnel are properly trained.

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The authorization means the energy giant can start the flow of natural gas, but it's not clear when that will happen.

"From our perspective, this is probably one of their last major hurdles," said Steve Bigelow, executive adviser for the board. "It's Encana that's got the final call now on exactly when they'll proceed with first gas."

A spokesperson with Encana was not available for comment.

The project has been plagued by delays since it received regulatory approval in 2007 and was initially supposed to go into production by late 2010.

Encana put the development on hold temporarily in January while an investigation was carried out into why an electrical fire broke out on a production platform off the coast of Nova Scotia, causing the evacuation of 46 people.

Dutch-based SBM Offshore, which owns and operates the platform on behalf of Encana, said last fall that natural gas wouldn't begin flowing until prior to June 30.

The province has said it stands to receive between $50 million and $300 million in royalties over Deep Panuke's forecasted lifespan of 13 years.

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In its authorization, the board said Lloyd's Registry also certified that the facilities are fit, are in compliance with regulations and can be operated without polluting the environment.

The board said it will conduct an ongoing program to monitor regulatory compliance for the production phase of the project.

Deep Panuke is located about 250 kilometres southeast of Halifax.

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