The Quoddy Tides

Eastport, Maine

2010 June 11

Corridor and Apache partnership
expands natural gas exploration

by Lora Whelan

A geological deposit of shale in the Sussex area of New Brunswick is garnering attention from natural gas exploration companies. A 15 year old company, Corridor Resources Inc. of Halifax, has a number of license holdings in New Brunswick, Quebec, Prince Edward Island, Labrador and Newfoundland, but its one producing property is located near Sussex at McCully Field.

Natural gas extracted from shale is called by the industry "unconventional natural gas." According to IHS Cambridge Energy Research Associates (IHS CERA), shale gas has jumped in 10 years from one percent to 20% of U.S. natural gas supply. The firm estimates that usage could be at 50% by 2035, with the electric power industry doubling its use from 19 to 35 billion cubic feet per day. The company notes in its May 2010 report, Fueling North America's Energy Future, the increase in shale natural gas and the promise of a stable domestic supply will more than likely act as a stabilizing factor in the case of international market disruptions.

Since 2003 Corridor Resources, in a partnership with Potash Corporation of Saskatchewan, has been producing natural gas at the McCully Field location in New Brunswick. In 2007 Corridor built a 50-kilometre pipeline to connect the facility to the Maritimes and Northeast Pipeline (M&NP), which delivers natural gas to Canadian and U.S. markets. The Sussex area is about halfway between Saint John and Moncton. In December 2009 Corridor entered into an agreement with Apache Canada Ltd. to expand natural gas exploration in the area.

In 50 years the U.S. based Apache Corporation C a specialist in oil and gas exploration and production C has gone from a $250,000 start up to a $2.8 billion company. The company is headquartered in Texas and has operations in the U.S., Argentina, Australia, Egypt, Canada and other locations. In Canada, Apache's 2009 exploratory production accounted for 13% of the company's total production, with a total of 4.4 million net acres and 201 wells.

According to a press release from Corridor, the agreement between the two companies will run in phases. The initial exploration period will end in June 2011 with the expectation that Apache will invest at least $25 million in well drilling. Drilling in shale necessitates using a combination of techniques. Apache is expected to use drilling, fracturing, testing and completing or abandoning one or more horizontal or vertical oil, gas and/or shale gas wells. The appraisal program will finish with Apache having earned a 50% working interest in the spacing units drilled and the option to participate in phase two of the project. If Apache elects to continue participation, the second phase is expected to be completed by March 31, 2013, with Apache investing at least $100 million in further development and earning a 50% interest in approximately 116,000 acres.

Currently the McCully Field pumps about 35 million cubic feet of natural gas per day, but Corridor estimates that there is 67.3 trillion cubic feet of natural gas in southern New Brunswick.

The Maritimes & Northeast Pipeline system increased maximum capacity from 400 million to 840 million cubic feet per day with the addition of the Saint John LNG Canaport facility. The volume flowing through the pipeline varies on a daily and seasonal basis. Maritimes, director of stakeholder outreach, Mary Lee Hanley, says, "We are very encouraged by the activities in New Brunswick, and we are poised to accommodate these expanding resources." The pipelines, she explains, is "readily expandable."

IHA CERA reports that North American shale gas discoveries are estimated to be in the realm of 3,000 trillion cubic feet (Tcf), with Canada's share exceeding 500 Tcf.


© 2010 The Quoddy Tides
Eastport, Maine
Article republished on Save Passamaquoddy Bay website with permission.