Imperial asks for delay in Arctic pipeline hearing
Thu Jul 14, 2005 4:55 PM ET
today.reuters.com
By Jeffrey Jones
CALGARY, Alberta (Reuters) - Imperial Oil Ltd. (IMO.TO: Quote, Profile, Research) has asked that public hearings into a C$7 billion ($5.6 billion) Canadian Arctic pipeline be delayed by at least two months to allow more time to resolve thorny issues with native groups and regulators.
Hearings for the proposed Mackenzie Valley gas pipeline in the Northwest Territories had been tentatively slated to start in late August or early September. They are now unlikely to begin before November, an Imperial spokesman said on Thursday.
In a letter to Canada's National Energy Board dated July 13, Imperial said it plans to advise the regulator on its progress by early September, and that it understands it will take two months from that time to arrange hearings.
"We said we still have more work to do and we're not quite ready," Imperial spokesman Hart Searle said. "We are working on all fronts, all the priority issues we've been articulating and discussing, but we just haven't made sufficient progress to the point where we're ready to commit to the hearings."
The 1,350 km (840 mile) line would ship up to 1.9 billion cubic feet of badly needed gas a day to Canadian and U.S. markets from the Mackenzie Delta on the Beaufort Sea coast. The backers have said the line could be in service around the end of the decade.
In late April, Imperial and its industry partners halted all non-regulatory work, citing much larger than expected cash demands from aboriginal groups in exchange for access to lands, as well as costly red tape.
Since then, companies, governments and native leaders have been in intense talks to resolve the issues, a key one being disagreements over the responsibility of funding social programs in northern communities affected by the project.
Imperial has nearly completed a detailed proposal for a common access and benefits agreement for the native groups, Searle said.
"Once we issue them we intend to have follow-up meetings with the regions soon after," he said. "At the same time, we are carrying on discussions with government officials with the objective of obtaining more clarity on the regulatory front, on the remaining steps that are outlined in the co-operation plan."
The oil companies face obtaining thousands of construction permits for various parts of the project, and are still not clear on how that process will be handled by northern regulators, he said.
Some of the uncertainty that has enveloped plans for North America's first major Arctic gas pipeline was lifted on Monday when one of the four northern aboriginal groups affected by the project agreed to end a legal fight over it.
The Deh Cho First Nations, whose lands make up 40 percent of the proposed route, dropped two lawsuits against Ottawa when the government agreed to give them a larger role in the regulatory review of the project as well as millions of dollars for economic development programs.
However, Deh Cho Grand Chief Herb Norwegian stressed that the agreement did not mean the First Nation automatically approves of the pipeline.
The other industry partners in the project are Shell Canada Ltd. (SHC.TO: Quote, Profile, Research), ConocoPhillips (COP.N: Quote, Profile, Research), Exxon Mobil Corp. (XOM.N: Quote, Profile, Research) and the Aboriginal Pipeline Group.
($1=$1.21 Canadian)
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