As LNG Canada shipped its first LNG cargo from the newly completed facility in Kitimat, on the northwest coast of British Columbia, activity is ramping up on the East Coast especially offshore natural gas.

LNG Canada consists of an export plant that cools the natural gas to a liquid using a combination of hydroelectricity and natural gas, states LNG Canada — a consortium of Shell, Mitsubishi Corporation, Petronas, PetroChina and Korea Gas Corp.

The accompanying pipeline, called Coastal GasLink, is a partnership owned by affiliates of TC Energy, Alberta Investment Management Corporation (AIMCo), and US private equity firm KKR.

Simultaneously, the Maritime province of Nova Scotia is getting back into petroleum exploration for the first time since 2018, when its last offshore natural gas project ended.

According to CBC News, The joint provincial-federal offshore energy regulator announced Monday it's issuing a call for bids for offshore oil and gas exploration on 13 parcels totalling more than 3.3 million hectares…

The Canada-Nova Scotia Offshore Energy Regulator is advertising exploration licences around the Scotian Shelf and Scotian Slope, which are close to but exclude the Sable Island National Park Reserve and the Gully Marine Protected Area.

A government news release says there is a known reserve of at least 3.2 trillion cubic feet of offshore natural gas on the Scotian Shelf.

Companies have the better part of a year to submit bids. The deadline is April 28, 2026.

Nova Scotia Energy Minister Trevor Boudreau said offshore natural gas presents a “major economic opportunity”. Although Boudreau said the province is committed to reaching 80 percent renewable energy consumption by 2030, he maintains natural gas is key to the transition.

Nova Scotia still burns a lot of coal but 2030 has been set as the year for Nova Scotians to stop using the carbon-emitting fuel for electricity.

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Its fossil fuels-to-renewables strategy features offshore wind. Premier Tim Houston has been pitching upwards of 60 megawatts.

The CBC quoted Boudreau saying he believes offshore wind and offshore petroleum can operate in tandem — a claim that NDP leader Claudia Chender questions.

It was in 2022 that the regulator last put out a call for offshore petroleum. An exploration license was issued to Inceptio Limited in 2023, but within two months Nova Scotia and the federal government vetoed the regulator’s decision and the license was withdrawn.

According to the Canadian Association of Petroleum Producers (CAPP), about 4 percent of Canada’s oil production comes from four projects offshore Newfoundland and Labrador: Hibernia, Terra Nova, White Rose and Hebron.

Hibernia was the country’s first offshore oilfield to come online in 1997. Hebron was the latest in 2017. Hibernia is currently Canada’s second largest oilfield, with cumulative production about half that of the largest field, Pembina in Alberta.

The four offshore fields produce an average 240,000 barrels per day.

The offshore oil industry of Nova Scotia accounts for about 0.07% of Canadian petroleum production. The majority of its offshore industry is located on the Nova Scotian continental Shelf, within the Sable Island offshore natural gas fields. (Wikipedia)

New discoveries

Norwegian oil giant Equinor started the ball rolling in January on a project to develop its Bay du Nord oil project off the coast of Newfoundland and Labrador by awarding front-end engineering design work.

The project is located in the Flemish Pass basin, about 500 km northeast of St. John’s, in waters approximately 1,170 meters deep.

Equinor received approval from the Canadian government to develop Bay du Nord in April 2022. However, in 2023, the project was shelved for three years due to a rise in costs.

Offshore Energy reports Bay du Nord, once developed, is expected to be among the world’s lowest-carbon projects per barrel of oil.

Equinor says the company made the first discovery in 2013, followed by additional discoveries in 2014, 2016 and 2020. The later discoveries, lying about 650 meters deep, are in an adjacent exploration license and are potential tie-ins in a joint project development.

The $12 billion Bay du Nord field will be developed using a floating production platform for storage and offshore loading.

US-based oil major ExxonMobil said in June it has discovered 75 million barrels of oil at its producing Hibernia and Hebron fields. Upstream Online says the news will be welcomed by Newfoundland and Labrador following a number of high-profile exploration failures in recent years.

Located in the Jeanne d'Arc basin, the Hibernia and Hebron complexes are largely exploited by huge concrete gravity based (GBS) platforms - designed to deflect icebergs - from which platform rigs drill infill, development, appraisal and exploration wells.

The exploration wells target untapped reservoirs and fault blocks where sub-surface mapping indicates oil is present.

Kerry Moreland, president of ExxonMobil Canada, said two of these recent wells were successful: one discovering 50 million barrels at Hebron and another finding 25 million barrels at Hibernia.

Apart from the Flemish Pass basin, the other area considered prospective for development is the Orphan basin. BP Canada has applied to drill it.

In Nova Scotia one exploratory project and 22 production wells have come and gone: the Sable Offshore Energy Project and the Shelburne Basin Venture Exploration Drilling Project.

The Sable Offshore Energy Project was Canada’s first offshore natural gas project. It was comprised of seven offshore platforms in five fields with 22 wells and 340 kilometers of subsea pipeline. The development was spread over 200 square kilometers near Sable Island in the North Atlantic. The seven platforms were located in shallow water with depths between 22 and 76 meters.

The Sable Offshore Energy Project was the most recent offshore petroleum project in Nova Scotia. Operations ended in 2018. Source: Canada-Nova Scotia Offshore Petroleum Board.

Interfield pipelines connected satellite fields to the central Thebaud complex, which included a processing facility and accommodations unit, a wellhead platform and a compression deck.

The Thebaud complex was connected by a 200-kilometer subsea pipeline to a gas plant located at Goldboro, Guysborough County. There, liquids were removed and sent by pipeline to the Point Tupper Fractionation Plant for additional processing and with its end products such as propane and butane delivered to market by truck, rail and ship. Market-ready gas was then transported from Goldboro to customers via the Maritimes & Northeast Pipeline.

The decommissioning process started in 2017, with ExxonMobil taking two years to plug and abandon the wells. (ExxonMobil)

Shell Canada proposed to conduct exploratory drilling in the Shelburne Basin, an area 250 kilometers offshore Nova Scotia. The project aimed to drill up to seven exploration wells from 2015 to 2019. However, the first well drilled was unsuccessful, and no further exploration has occurred in the area.

By Andrew Topf for Oilprice.com

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