CALGARY, Alberta, Oct 25 (Reuters) - EnCana Corp (ECA.TO) will build its own pipeline to ship gas to shore from its C$700 million ($721 million) Deep Panuke gas project off Nova Scotia rather than use the line from the nearby Sable project, an EnCana spokesman said.
EnCana had been weighing the two options since before it restarted regulatory proceedings early this year for the Atlantic Canada gas development.
"Each of the parties (EnCana and the Sable partners) looked at it. It was agreed that technical, commercial and operational circumstances were not something we could come to an agreement on. It didn't have optimal benefits for both," EnCana spokesman Alan Boras said.
EnCana gave the corporate green light on Thursday to Deep Panuke, which will be the first new project off the coast of Nova Scotia since Sable was developed in the 1990s.
It is due to start producing 200 million to 300 million cubic feet of gas a day in 2010.
The cost of building the pipeline to Goldsboro, Nova Scotia, from the gas field, 250 km (155 miles) southeast of Halifax, is included in the overall C$700 million capital budget, Boras said.
Sable partners Exxon Mobil Corp (XOM.N) and Royal Dutch Shell have their combined 18 % interest in the Deep Panuke project on the auction block.
-srbp-
