EnCana announced a new target date for the Deep Panuke gas field off Nova Scotia Wednesday.

The gas has been sold to a Spanish oil and gas company with majority ownership of the liquified natural gas terminal in Saint John.

Dave Kopperson, EnCana Corporation's Atlantic vice-president, said Wednesday that the natural gas company had negotiated a new timeline with Single Buoy Moorings (SBM), which EnCana hired to build and operate the production platform at the Deep Panuke gasfield off Nova Scotia. The field is about 250 kilometres southeast of Halifax on the Scotian shelf.

Deep Panuke offshore natural gas project

The production platform for Encana Corporation’s Deep Panuke offshore natural gas project is expected to produce gas by end of March 2012. (SBM Offshore)

EnCana had maintained that first gas from Deep Panuke would flow by the end of the year. But in August SBM said additional work on the platform meant first gas would not be ready until June 2012.

The project has been in the works for 10 years and had been scheduled to start production in December. SBM was unable to meet that deadline.

"Until recently we were expecting production would flow from the platform by the end of this year. Then SBM announced it expects the platform to be ready for service in the first half of 2012. Disappointing for sure," said Kopperson.

EnCana said it expects gas by the end of March.

"But we have been in discussions about the work to be complete and if the plan is executed efficiently, we should be on by the end of [the first quarter of] 2012."

The two companies remain engaged in a multi-million-dollar lawsuit over who should pay for design changes and cost overruns on the platform.

All the gas from Panuke has been sold to Repsol YPF, a Spanish oil and gas company that has majority ownership of the liquified natural gas terminal in Saint John New Brunswick.