"I can just tell you the premier and the energy minister will be talking about new energy developments in Nova Scotia," Energy Department spokesman Ross McLaren said Tuesday.

EnCana, the largest North American gas producer, put Deep Panuke on hold in early 2003, saying it needed time to improve the fundamental economics of the Atlantic coast offshore project, which had then been expected to cost C$1.1 billion (US$980 million) to develop.

It said it needed to find ways to cut costs of transporting the 400 million cubic feet a day of expected production to shore and on to markets, and to get sweeter fiscal terms.

Deep Panuke, located 250 km (155 miles) southeast of Halifax, would be the second major gas project in the region after the producing Sable development. EnCana has had discussions with Sable partners about piggybacking onto that project's pipeline network.

The provincial government has been hoping for some offshore energy success after a string of exploration disappointments in recent years that led many major oil companies to hold off on drilling.

Since EnCana put the brakes on Deep Panuke, the cost of developing major energy projects has surged, but gas-market fundaments have also improved, spokesman Alan Boras said.

He declined to say if MacDonald was set to announce on Friday that the project is back on track, or moving toward being revived. But he pointed out that EnCana Chief Executive Randy Eresman has said a new application could be filed this year.

"We have said we've been in discussions with the province about the project," Boras said.

"We're going to hear what the premier has to say."

Sable partners, which include Exxon Mobil Corp., Shell Canada Ltd., Imperial Oil Ltd., Pengrowth Energy Trust and Mosbacher Operating Ltd., have been struggling to keep production up as their field ages, FirstEnergy Capital Corp analyst Martin Molyneaux said.

"Shell and EnCana are going to have to have a meeting of minds and use the Sable facilities. I don't think Panuke as it stands can justify its own facilities," Molyneaux said.

"Somehow, they are going to have to layer on Deep Panuke on the Sable operation in the fullness of time."

Meanwhile, EnCana has drilled additional wells near the Deep Panuke field, which may add to the project's potential resources.

"We've done a lot more work on the geology and the reservoir and our understanding in trying to build confidence in the potential of the reservoir, so that has changed," he said. "And we continue that work."