By OGJ editors
HOUSTON, Apr. 29 -- Imperial Oil Ltd. said operational work for the proposed $7 billion Mackenzie Gas Project stopped while project partners finish benefit and access agreements and pursue "a clear regulatory process, including time lines."
The project would include development of an estimated 6 tcf of gas in Mackenzie Delta and construction of a gas and natural gas liquids gathering system, gas pipeline, and related facilities. The Mackenzie Valley pipeline would have initial design capacity of 1.2 bcfd.
Partners are ConocoPhillips Canada, Shell Canada Ltd., ExxonMobil Canada, and the Aboriginal Pipeline Group.
The companies halted geotechnical data gathering programs, the start of detailed engineering, and preparatory work on construction contracts. They are continuing work to advance regulatory review, Imperial said.
Hearings due
The group plans construction of Mackenzie Valley gas and natural gas liquids pipelines from Canada's Arctic to southern markets. It filed an 8,000-page application with Canada's National Energy Board in October 2004.
"Substantial progress will need to be made prior to the start of public regulatory hearings . . .to allow the project to continue," the statement said. Those hearings are expected this summer.
Imperial said progress on benefits and access agreements is hampered by "requests for terms that are well beyond the direct responsibility of the project." It also cited "concerns about the pace and coordination of the regulatory process."
J. Michael Yeager, Imperial Oil senior vice-president, said, "We are not giving up on developing a project." But he added that federal and territorial governments are being asked to help resolve concerns of the consortium members.
Henry Sykes, president of ConocoPhillips Canada, said, "Resolution of these outstanding issues in a timely manner is essential for the project to proceed."
Ian Kilgour, Shell Canada's senior vice-president, exploration and production, said: "The decision to halt these work activities was extremely difficult, but it was necessary. The coventurers have serious concerns regarding the pace of progress relative to our ongoing investments, and the lack of convergence in some key project areas. We remain hopeful we can get back on track."