Canadian minister fears Mackenzie Delta gas could be stranded

Natural gas reserves in Canada's arctic could be stranded for years if a pipeline from Alaska is built before one from the Mackenzie Valley, says the energy minister of the Northwest Territories. Joseph Handley urged the federal government and Canadian companies to be more aggressive in supporting a line from the delta.

Apr 30th, 2001


By Jim Stott
Special Correspondent, OGJ Online

CALGARY, Apr. 30 -- Natural gas reserves in Canada's arctic could be stranded for years if a pipeline from Alaska is built before one from the Mackenzie Delta, said the energy minister of the Northwest Territories.

Joseph Handley urged the federal government and Canadian companies to be more aggressive in supporting a line from the delta.

"It's important that we move the delta gas quickly and, in my view, ahead of the Alaskan gas," Handley told a Calgary conference. He said otherwise, the delta gas could be stranded for 10 to 15 years until it is marketable again.

Alaska's North Slope has proven reserves of 31 tcf of gas and 68 tcf in estimated reserves. The Mackenzie Delta-Beaufort Sea area has 6 tcf of proven reserves and 64 tcf of estimated reserves.

Handley said it did not make sense that Canadians would support the sale of Alaskan gas and a pipeline from Alaska through Canadian territory while Canadian reserves remain in the ground.

The Yukon government has supported a line which would follow the Alaskan Highway and through its territory to southern markets. The Northwest Territories supports a line through the Mackenzie Valley to northern Alberta. Ottawa is neutral and has established a cabinet committee to examine the issue.

Handley said development of Alaskan gas could flood the market and depress prices, delaying development of Canadian gas and a pipeline from the delta. He said a Mackenzie Valley pipeline could be built in 4-5 years with cooperation between stakeholders and would cost an estimated $2.3 billion-$3 billion (US).

Handley estimated an Alaskan line could take 6-7 years to build and could cost an estimated $7 billion-$15 billion (US). Meanwhile, he said, Mackenzie Delta gas would have to wait.

Canadian pipeline companies such as TransCanada PipeLines Ltd. and Westcoast Energy Inc. believe there would only be a short delay in Mackenzie Delta development if an Alaskan line came first.

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