Canada's Mackenzie Pipeline has priority -minister
Fri Jul 8, 2005 07:52 PM ET
yahoo.reuters.com
By Jeffrey Jones
CALGARY, Alberta, July 8 (Reuters) - Ottawa aims to solve a regulatory logjam delaying a C$7 billion ($5.6 billion) gas pipeline in its own Arctic before making a ruling that is key to allowing a larger line from Alaska proceed, Canada's finance minister said on Friday.
The Mackenzie Valley gas pipeline, which would carry badly needed supply to southern markets from from the coast of the Beaufort Sea, is stalled after oil companies planning it balked over huge cash demands for access to native lands.
Meanwhile, backers of the $15 billion Alaska Highway pipeline project are waiting for Ottawa to rule on whether TransCanada Corp. (TRP.TO: Quote, Profile, Research) , which won the right to build the Canadian portion nearly three decades ago, still has that right, or if it can be put up for competitive bid.
"We've been working vigorously on that topic. Our first priority ... is to make sure we get the work done in a timely way on the Mackenzie Valley project so that can proceed at the earliest possible moment," Minister of Finance Ralph Goodale said at a news conference that followed a day of discussions with U.S. Treasury Secretary John Snow.
Industry executives and analysts have said North America will need the supplies of both projects as production wanes from traditional gas fields across the continent and demand continues to increase with economic expansion.
The Mackenzie project would ship up to 1.9 billion cubic feet a day and the Alaska project from the North Slope up to 6 billion. However, delays in the early stages have threatened to push start-up of the projects well into the next decade.
Talks between oil companies behind the Mackenzie line, governments and native groups are making progress, Goodale said.
Project leader Imperial Oil Ltd. (IMO.TO: Quote, Profile, Research) and its partners halted all but the regulatory aspects of the project in late April, partly because native communities demanded hundreds of millions of dollars to allow the line to cross their lands.
The companies said the government should play a major role in resolving the disagreement, because it has jurisdiction over the Northwest Territories. The partners said they wanted resolutions to many of the thorny issues before a public hearing is slated to start in the autumn.
"We're quite encouraged about how the Mackenzie Valley situation is now unfolding," Goodale said.
"Obviously, right behind that is the Alaska project. There are regulatory decisions yet to be taken."
The two countries' top finance officials did not discuss the timing, however, Goodale said. He pointed out Canada's Deputy Prime Minister, Anne McLellan is leading that effort.
TransCanada says its rights to construct the Canadian part of the pipeline are still in good standing. However, BP Plc (BP.L: Quote, Profile, Research) , one of three major gas producers with North Slope reserves, has said the scope of the development has changed, meaning other players should be able to make bids.
TransCanada's rival, Enbridge Inc. (ENB.TO: Quote, Profile, Research) , is vying to compete, and in June had said it expected Ottawa to make a ruling shortly. |
