Oil Companies Halt C$7 Bln Arctic Canada Pipeline By Jeffrey Jones
news.yahoo.com
[Sounds like they're playing hardball to try to speed things up. -Snow]
28 minutes ago
Oil companies planning North America's first major Arctic natural gas pipeline slammed the brakes on the C$7 billion ($5.6 billion) project on Thursday, blaming the slow pace and complexity of the regulatory process.
The companies said they were still committed to the Mackenzie Valley project, but their move adds much uncertainty to a development that has been several decades in the making, and is viewed as a key piece in the puzzle of meeting the continent's growing demand for gas.
Lead partner Imperial Oil Ltd. said the group is halting work on gathering geotechnical data, detailed engineering and contracting for construction. It will continue efforts to advancing the regulatory review, however.
"We need to get to a level of progress and certainty in some key areas before we can commit to the significant investment that's required for the project," Imperial spokesman Hart Searle said.
There will have to be progress on several issues by the time public hearings are slated to start in late summer for the project to continue, Imperial warned.
At issue is the finalization of benefits and access agreements for communities in Canada's Northwest Territories, through which the line would run, and what the company called a "clear regulatory process" with timelines for various issues.
Many of these issues should be solved by the federal and territorial governments, but the project backers have been asked to supply answers instead, Imperial said.
"Despite significant effort and expenditures by the proponents and other parties, the reality is that adequate progress is not being made in key areas," Imperial vice-president Michael Yeager said in a statement.
"Our efforts to resolve issues in these areas have not diminished. However, to achieve real progress, approaches need to change."
Last week, the company's chief executive, Tim Hearn, voiced frustration over the review process, saying a 2010 start-up was looking more unlikely.
Hearn said his company had been in talks with Ottawa aimed at speeding up the pace after the government had asked for answers to about 3,000 questions that stemmed from the 6,500-page application, filed in October.
He lamented what he called "the inefficiencies and unrequired bureaucracy" in the review process for the 1,350 km (840 mile) line that would tap 6 trillion cubic feet of gas reserves in the Mackenzie Delta on the Beaufort Sea coast.
The Canadian government said the companies' move was cause for concern, but not alarm.
"Obviously it's not great news but it's more of a bump in the road than a slap in the face," a federal official told Reuters, saying Ottawa was heartened that the oil companies had said they were still committed to the project.
Imperial's partners in the group planning the pipeline, which would carry up to 1.9 billion cubic feet of gas a day into Alberta's major pipeline network, are Shell Canada Ltd., ConocoPhillips, Exxon Mobil Corp. and the Aboriginal Pipeline Group.
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