Northern gas expansion set back a year
Gordon Jaremko, Edmonton Journal
Published: December 12, 2005
canada.com
Slow progress in negotiations between government and native organizations has delayed Arctic natural gas pipeline construction by a year.
A new schedule for the $7-billion Mackenzie Gas Project sets back the date for deliveries to late 2011, a year later than expected. Even the later target will only be hit if the northern regulatory process becomes efficient, the industry group says.
"Timely action will be required to maintain the schedule," project spokesman Pius Rolheiser emphasized in an interview.
The revised industry agenda, in new letters to the National Energy Board and the parallel environmental Joint Review Panel of government and aboriginal agencies, calls for a prompt start on public hearings in January.
All concerned have to avoid further episodes of sluggish negotiations like the slow progress on land access and benefits agreements that stalled the project from April through November this year, the agencies are warned.
"Significant expenditures and commitments by the project proponents, as well as timely actions by other parties including governments and regulators, will be required to maintain this schedule. Investment decisions to maintain this schedule will be subject to review as the regulatory process proceeds."
To stay on track, the project says it needs roving panels of the regulatory agencies to finish planned mobile hearings across the Northwest Territories then grant approvals by September of 2007.
A final decision on whether to build the mammoth development is promised in the summer or early fall of 2007 by project sponsors Imperial Oil, Shell Canada, ConocoPhillips Canada and ExxonMobil Canada.
The northern environment demands a brisker pace than the authorities have set since the revival of the aborted 1970s arctic gas megaproject began more than five years ago, Rolheiser indicated.
Most northern work can only be done in winter, when marshy terrain on the Mackenzie Delta and along the proposed Mackenzie Valley Pipeline freezes hard enough to support heavy equipment on temporary ice roads and construction sites.
The new plan calls for a start in January of 2008 on pipeline right-of-way clearing, site preparations and $2.2 billion in Delta gas production facilities.
Pipeline construction is scheduled for the winters of 2009-10 and 2010-11, with the seasonal work force expected to peak at about 7,000 during both busy winters.
An engineering review shaved about four per cent off the forecast $4.8 billion cost of the northern pipeline and reduced its environmental effects, the gas consortium also says in a new progress report to the NEB.
Savings of $178 million were made by dropping one of four proposed compressor stations and by route adjustments. The pipeline’s length is shortened by 26 kilometers to a new total of 1,194 kilometers. Requirements for construction camps and roads are also reduced.
But the design overhaul does not change project needs for about $2.8 billion in aid still under negotiation with Ottawa, Rolheiser said. No deadlines were set for finishing a package expected to include $1.2 billion in royalty incentives or federal investments plus a $1.6-billion loan guarantee to cover the northern Aboriginal Pipeline Group’s one-third share in construction costs.
© Edmonton Journal 2005 |
