10/10/2013 12:13 EDT | Updated 12/10/2013 05:12 EST

Husky, Newfoundland announce plans to build West White Rose platform in Argentia

PLACENTIA, N.L. - Newfoundland and Labrador Premier Kathy Dunderdale has announced plans with Husky Energy to build a new offshore oil platform for the West White Rose Extension.

Dunderdale says a new wellhead platform supported by a concrete gravity structure will be built in Argentia.

The structure is to be constructed at a new dedicated graving or dry dock site with gates that could allow for future industrial opportunities.

The platform will be used to draw oil from the West White Rose Extension site about 350 kilometres east of St. John's.

Husky (TSX:HSE) now estimates up to 115 million barrels of oil can be recovered from the site using subsea flow lines to the SeaRose production vessel.

First oil is forecast for 2017 if the development is approved.

Dunderdale said her province will gain an estimated $3 billion from the White Rose Extension project in benefits, including royalties and taxes.

"This is an exciting day for us, and for an industry which has provided tremendous benefit to the people of our province," she said in a statement Thursday.

The signing Thursday of an updated benefits deal with the province is expected to speed up filing of an adjusted development plan and final sanction of the project.

Dunderdale said the project would create the equivalent of about 12,000 full-time jobs in the province, vaulting Argentia into the big time as an oil-sector player and industrial port.

Malcolm Maclean, Husky's Atlantic region vice-president, said Thursday's agreement is an important step in the corporate process and a final investment decision is contingent on regulatory and partner approvals.

The White Rose extension is a partnership between Husky Energy, Suncor Energy and Nalcor Energy, the province's Crown utility company.

The provincial government through Nalcor has a five per cent equity stake in the project.