Sable Just the Beginning - Premier MacLellan

The Sable Offshore Energy Project is just the beginning of a massive offshore gas and oil industry on Canada's East Coast, Premier Russell MacLellan said today in Fredericton.

Premier MacLellan said the Sable project, which will bring gas ashore in about 18 months, represents only about one-fifth of the estimated 18 trillion cubic feet of recoverable gas on the Scotia Shelf.

Speaking at the 23rd annual Conference of New England Governors and Eastern Canadian Premiers, Nova Scotia's premier said the Sable project, which will deliver gas to markets in many of those same states and provinces, is a seed project.

"Someone asked me recently why the Sable project is so important to Nova Scotia. I said obviously any project that will create hundreds, if not thousands of jobs, and bring billions of dollars into the economy is important," he said.

"But Sable may be even more important as a beginning. The Sable project kick-starts a potentially massive industry that will deliver jobs, income and other benefits to Nova Scotians for decades to come."

He said the initial $3-billion Sable project will deliver gas to markets in Nova Scotia, New Brunswick and New England. In addition, natural gas liquids will be processed into propane, butane and condensate at Point Tupper. The Sable project will generate almost 3,000 person-years of employment and royalties to Nova Scotia estimated in the range of $2 billion to $3.5 billion.

"We entered into an agreement that would ensure Nova Scotians benefit to the greatest extent possible from the Sable project," said Premier MacLellan. "But we also had to ensure the deal was a good enough that the oil companies would proceed, because Sable opens the door to a long-term offshore industry that will pay Nova Scotians dividends for generations."

Premier MacLellan noted that of the 145 wells drilled to date on the Scotia Shelf, 22 have resulted in significant discoveries. That success rate is well above the 10 per cent industry norm. There are 14 gas or gas and oil discoveries off Nova Scotia, in addition to Sable.

All of this has translated into unprecedented interest in energy from Canada's East Coast, the premier said. Last month Chevron, one of several new players to Nova Scotia's offshore, bid $66.6 million for the rights to one block on the Scotia Shelf. Premier MacLellan said overall offshore potential off Canada's East Coast is estimated to be two-thirds as large as the huge North Sea development.