By Paula Dittrick
Senior Staff Writer
HOUSTON, Apr. 26 -- Construction of both the Alaska natural gas pipeline and the Mackenzie River Delta pipeline are needed to help meet escalating gas demand, the Northwest Territories minister of industry, tourism, and investment told the Ziff Energy Group gas strategies conference.
Speaking in Houston Apr. 25, Minister Brendan R. Bell said the race between sponsors of the Alaska and the Mackenzie River Delta projects to build the first arctic gas pipeline has evolved into a cooperative effort, partially in anticipation of expanding LNG imports.
The Canadian project appears to be about 2 years ahead of the Alaskan pipeline in the regulatory and permitting process. Bell expects the Mackenzie pipeline to be built first, preventing competition between the two proposed pipelines for labor and steel.
"The clock is collectively ticking on both these projects," Bell said. "We've got to get this gas to market. The dry run for Alaska is Mackenzie."
He said the Northwest Territories and Alaska are in discussion about training residents to work on both pipelines.
"Our first interest is to get the local people trained," Bell said. "There will be many more job opportunities than there are people."
The proposed $7 billion (Can.) Mackenzie pipeline would stretch more than 750 miles to transport Mackenzie River Delta gas to Alberta and beyond. Plans calls for initial capacity of 1.2 bcfd, expandable to 1.8 bcfd.
The project has moved into regulatory reviews. Hearings before the Joint Review Panel and the National Energy Board are expected to conclude by yearend. Construction could begin by late 2007, and the system could be operating by late 2011, Bell said.
Numerous issues remain unresolved, including land access arrangements. The Deh Cho First Nations (DFN) aboriginal group in the southern part of the proposed route remains outside the Mackenzie Valley Aboriginal Pipeline Group, which owns 33.3% interest in the project. The other three aboriginal groups have joined the project.
Bell said DFN supports the pipeline development but has concerns involving land access that probably will be resolved. In addition to the Aboriginal Pipeline Group, other pipeline partners are Imperial Oil Ltd. 34.4%, ConocoPhillips Canada 15.7%, Shell Canada 11.4%, and ExxonMobil Canada 5.2%.
The proposed Alaska Highway gas pipeline would move North Slope gas to the Lower 48. Alaska and all three North Slope producers have agreed on a pipeline contract, said Gov. Frank H. Murkowski, who proposed related legislation to reform Alaska's oil production tax (OGJ, Mar. 6, 2006, p. 32).
The producers are Alaskan subsidiaries of BP PLC, ExxonMobil Corp., and ConocoPhillips. Murkowski said technical issues connected with the contract and oil fiscal stability terms still need to be addressed.
Once Alaska's legislature approves the contract, the producer group could make plans and seek permits. The project also will need permits and a right of way through Canada.
Contact Paula Dittrick at [email protected].