The following article appeared on www.Rigzone.com on Tuesday February 7, 2009. Repsol could purchase Canadian Superior Energy's 5(C) Block to guarantee its complete source of natural gas for the next 20 years.

Repsol to Take All Output from EnCana's Deep Panuke

Spain's Repsol has agreed to buy all the output from EnCana Corp's $700 million Deep Panuke natural gas project off Canada's Atlantic Coast, as the Spanish firm readies a push into the U.S. Northeast.

Repsol will buy Deep Panuke's production of up to 300 million cubic feet per day of natural gas output for the life of the project, adding to the Spanish firm's growing Canadian presence.

Repsol is already active in Canada, with a 75 percent stake in the Canaport LNG import and regasification terminal, which is nearing completion in Saint John, New Brunswick. That facility will export gas into the U.S. Northeast.

"Our target is to get a 20 percent share of the (U.S.) Northeast market," said Kristian Rix, a spokesman for Repsol. "So we built Canaport and had the opportunity to get our hands on some more gas from somebody who wanted an offtake agreement ... It was an ideal situation."

Lori MacLean, a spokeswoman for EnCana, Canada's biggest oil and gas producer, said financial terms of the agreement are being kept confidential but the agreement is effective immediately.

Deep Panuke contains as much as 892 billion cubic feet of gas. The project, 250 kilometers southeast of Halifax, Nova Scotia, is expected to begin production in the fourth quarter of 2010. It will be Nova Scotia's first offshore development since the Sable gas field, which started up in 1999.

Along with its investment in Canaport, Repsol last year gained drilling rights to three exploration parcels in the waters off the Canadian province of Newfoundland and Labrador, partnering with Petro-Canada and Husky Energy Inc .

EnCana shares were down C$2.97, or 5.5 percent, at C$51.14 late on Tuesday afternoon on the Toronto Stock Exchange.

Repsol is already active in Canada, with a 75 percent stake in the Canaport LNG import and regasification terminal, which is nearing completion in Saint John, New Brunswick. That facility will export gas into the U.S. Northeast.

"Our target is to get a 20 percent share of the (U.S.) Northeast market," said Kristian Rix, a spokesman for Repsol. "So we built Canaport and had the opportunity to get our hands on some more gas from somebody who wanted an offtake agreement ... It was an ideal situation."

Lori MacLean, a spokeswoman for EnCana, Canada's biggest oil and gas producer, said financial terms of the agreement are being kept confidential but the agreement is effective immediately.

Deep Panuke contains as much as 892 billion cubic feet of gas. The project, 250 kilometers southeast of Halifax, Nova Scotia, is expected to begin production in the fourth quarter of 2010. It will be Nova Scotia's first offshore development since the Sable gas field, which started up in 1999.

Along with its investment in Canaport, Repsol last year gained drilling rights to three exploration parcels in the waters off the Canadian province of Newfoundland and Labrador, partnering with Petro-Canada and Husky Energy Inc .

EnCana shares were down C$2.97, or 5.5 percent, at C$51.14 late on Tuesday afternoon on the Toronto Stock Exchange.

http://www.canaportlng.com/pdfs/who_...

Cheers; Scott