Provincial Government Advances Offshore Natural Gas Development

The Provincial Government is moving forward with plans to advance offshore natural gas development, releasing new findings that highlight significant potential in the Jeanne d’Arc Basin.

Today, the Honourable Lloyd Parrott, Minister of Energy and Mines, announced completion of Phase II of the Natural Gas Resource Assessment of the Jeanne d’Arc Basin, building on the Phase I assessment released in 2025. Together, the assessments provide a clearer understanding of the province’s recoverable natural gas resources and support efforts to advance to commercial development.

The Provincial Government is also launching targeted consultations with industry and stakeholders on a new offshore natural gas royalty framework. This framework is intended to provide clarity, consistency, and transparency for potential investors.

Significant Potential Identified

• The additional natural gas resource base across the 21 study areas in Phase II is estimated to range from 10.2 to 25.5 trillion cubic feet (Tcf), with a best estimate of 16 Tcf.
• Combined results from Phases I and II estimate total recoverable gas between 19.8 and 35.4 Tcf, with a best estimate of 27.6 Tcf.
• By comparison, Canada’s first offshore natural gas project (Sable Offshore Energy Project in Nova Scotia), was sanctioned on approximately three Tcf of recoverable gas and produced two Tcf over nearly 20 years.

Strong Development Advantages

• All 39 areas included in the combined Phase I and II assessments of natural gas in the Basin are in shallow water (less than 130 m deep).
• Prospects are located within 50 km radius of each other and of existing infrastructure.
• Areas are supported by high-resolution 3D seismic data.
• Many locations already have flow-tested discovery wells, helping confirm resource estimates.
• A significant portion of these resources is not currently licensed, leaving opportunities open for future development.

Resource assessments completed between 2011 and 2021 estimate 329.1 trillion cubic feet of natural gas in-place potential within less than 20 per cent of the offshore area.

Budget 2026 includes $584,000 for a Natural Gas Feasibility and Investment Opportunity Study. This third phase will evaluate the technical and economic viability of various development options. Budget 2026 also included funding dedicated to the development of a 10-year Energy Plan which will guide the development of both renewable and non-renewable resources.

Quotes
“Our government is committed to developing our natural resources for the benefit of all of us. We have been actively promoting natural gas opportunities offshore and working to attract interest in exploration and development. This latest assessment is an important part of our natural gas strategy. It will provide valuable information for potential investors and support future development of our offshore natural gas.”- Honourable Lloyd Parrott Minister of Energy and Mines

“Newfoundland and Labrador represents one of the most promising emerging natural gas opportunities in North America, and we are pleased to see government making this sector a priority. Advancing the identification of resources in the Jeanne d’Arc Basin, along with consultation on the development of an offshore natural gas royalty framework, marks an important step toward unlocking this potential. Energy NL members are excited about the future of offshore natural gas and their opportunity to participate in its development.” - Charlene Johnson, CEO Energy NL

“While earlier work focused on the potential development of natural gas within existing fields, this study expands the scope to include both known reservoirs and high probability prospects in unlicensed areas near existing infrastructure. Some of these prospects could support standalone development in a successful exploration scenario. Overall, the findings highlight a real opportunity to meet global energy security priorities.”- Jim Keating, CEO Oil and Gas Corporation of Newfoundland and Labrador

“The Government of Newfoundland and Labrador is undertaking important work to strengthen the understanding of the province’s resource potential. Enhanced geoscience knowledge is a constructive step toward advancing natural gas opportunities, reinforcing investor confidence, and informing policy. CAPP appreciates Premier Wakeham and the provincial government’s continued support of the oil and natural gas industry and its role as a foundational part of the province’s economy. A shifting global energy landscape highlights the strategic importance of Newfoundland and Labrador’s oil and natural sector with its direct access to international markets. With the right conditions, the province has the potential to play a larger role in Canada’s energy sector and export capacity supporting allies with reliable supply.”- Lisa Baiton, President and CEO CAPP