UPDATE 1-Encana may sell Deep Panuke natgas project by yearend -report

Fri Jul 18, 2014 5:07pm EDT
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(Adds company response in fifth paragraph and closing share price in final paragraph. In U.S. dollars unless noted)

July 18 (Reuters) - Encana Corp , Canada's largest natural gas producer, may sell its Deep Panuke natural gas project, off Nova Scotia's Atlantic coast, by yearend, Bloomberg News reported on its website, citing unidentified sources.

The company is working with financial advisers and could begin a formal sales process within months, with a deal that could raise as much as $2 billion completed by yearend, Bloomberg reported.

Deep Panuke, 250 kilometers (155 miles) southeast of Halifax, produced 253 million cubic feet of gas per day in the first quarter, its first full quarter of operation after years of construction delays.

The company has long maintained it does not consider the project to be central to its operations and that it could put Deep Panuke up for sale.

Jay Averill, a spokesman for the company, declined to comment on the possibility of a sale.

Encana is in the midst of a restructuring to increase production of valuable oil and natural-gas liquids while cutting back on dry natural gas and reducing the number of regions where it operates.

Encana shares rose 32 Canadian cents to C$23.24 on the Toronto Stock Exchange on Friday.

($1=$1.07 Canadian) (Reporting by Scott Haggett in Calgary, Alberta; Editing by Jeffrey Benkoe; and Peter Galloway)