Four Canadian majors have launched a 1-year feasibility study to determine the commercial viability of natural gas in Canada's Arctic.
The study project is backed by Imperial Oil Ltd., Gulf Canada Resources Ltd., Shell Canada Ltd., and Mobil Canada Ltd. Gulf has been conducting its own internal study for more than a year and says prospects are promising for a gas pipeline.
The project revives interest in plans going back almost 25 years to build pipelines to bring gas reserves in the Mackenzie Delta, Beaufort Sea, and Alaskan North Slope to southern markets.
Plans were shelved when Canada imposed a 10-year moratorium in 1980 on Mackenzie Valley development, and interest later waned because of poor economics.
Total potential reserves in the delta and Beaufort Sea areas have been estimated at 64 tcf.
Native leaders now generally endorse the possibility of development and a pipeline to the south.
A string of recent major gas discoveries in the Fort Liard area of the Northwest Territories, just north of the Alberta border, have sparked renewed interest in remote northern energy development (OGJ, Oct. 4, 1999, p. 40).
A number of pipeline companies, including TransCanada PipeLines Ltd., Westcoast Energy Inc., Enbridge Inc., and Foothills Pipe Lines Ltd. have expressed interest in an gas pipeline from the Arctic.
TransCanada has held discussions with various stakeholders on the possibility of a $3 billion (Can.) line extending the length of the Mackenzie Valley.
The company says a line is economic at today's strong natural gas prices.
Foothills has talked about renewal of plans for the Alaska Natural Gas Transportation System-possibly tied to LNG exports-for Alaskan and Canadian gas, which long ago had received regulatory approval from Canada and the US before being shelved as economically infeasible (OGJ, Feb. 21, 2000, Newsletter).
The project being studied by the four Canadian majors would involve development of three onshore fields initially and a pipeline from Inuvik on the arctic coast along the Mackenzie Valley to Norman Wells, NWT, and following an established pipeline route from there to Zama in northern Alberta.
There it could connect with a number of mainline systems with links throughout Canada and the northern US. The companies stress that the feasibility study is preliminary and that no decision will be made on a project. They hope to complete the study by yearend.