By the OGJ Online Staff
HOUSTON, Oct. 15 -- The Mackenzie Delta Producers Group has signed a memorandum of understanding with the Northwest Territories' indigenous peoples that provides a framework to develop the proposed Mackenzie Valley gas pipeline.
The four-member consortium, led by Imperial Oil Ltd., is studying the feasibility of a $3 billion (Can.) line with initial capacity of 800 MMcfd-1 bcfd. They estimate existing discoveries have 5.8 tcf of reserves. The memorandum of understanding specifically does not apply to a transportation system that includes Alaskan gas, said Imperial.
Imperial said the agreement has support from the Deh Cho First Nation of Fort Liard, which previously had refused to sign a pipeline development agreement approved by five other First Nation groups (OGJ Online, June 12, 2001).
The Mackenzie Valley Aboriginal Pipeline Corp. (MVAPC) represented the indigenous people. The other members of the producers' group are Conoco Canada Ltd., Shell Canada Ltd., and ExxonMobil Canada.
The preliminary agreement outlines areas of discussion: education, training, employment, and business opportunities; pipeline ownership; route selection; land access; support through the regulatory process; environmental assessments; and abandonment.
K.C. Williams, senior vice-president of Imperial, said, "The leaders who have indicated support represent about three-quarters of the aboriginal people of the Northwest Territories. We also recognize that not all leaders have yet decided to sign, and we are sensitive to and respect their concerns."
Before proceeding to the regulatory and project definition phase of an ongoing feasibility study, the producers' group will conclude other aspects, such as the negotiation of commercial agreements. The group plans to begin development of regulatory applications later this year, said Imperial.
The producers estimate that of the initial capacity of the line, Imperial will require 50%, Conoco 25%, Shell 17%, and ExxonMobil 8%. The MVAPC's target participation in the initial pipeline capacity is one-third, equal to 400-500 Mcfd, incremental to the producers' initial capacity. MVAPC would source gas for its share of capacity from other existing Mackenzie Delta and Mackenzie Valley discoveries.
Pipeline access for additional gas would be provided to other producers at commercial rates under Canadian regulatory oversight, said Imperial.