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Gold/Mining/Energy : Alaska Natural Gas Pipeline -- Ignore unavailable to you. Want to Upgrade?

To: Dennis Roth who wrote (36)	5/15/2005 9:45:50 AM
From: Dennis Roth	Respond to of 570

Price of Mackenzie Pipeline Progress: $100 million a year By DAVE EBNER AND SIMON TUCK Saturday, May 14, 2005 Updated at 1:46 AM EDT From Saturday's Globe and Mail theglobeandmail.com Calgary and Ottawa — It will take $100-million a year in new money from Ottawa to help break an impasse on the proposed $7-billion Mackenzie Valley natural gas pipeline, northern leaders say. Joe Handley, Premier of the Northwest Territories, and several First Nations leaders will travel to Ottawa next week to make a pitch for the money to cover social and economic spending in areas such as education and community infrastructure. “That's all new money,” Mr. Handley said in an interview. “It's big — but this is a huge project. It's huge for Canada.” The pipeline project has stalled on concerns from First Nations groups that community needs are being ignored. Imperial Oil Ltd., which leads a consortium of the world's largest energy companies that want to build the line, halted engineering work on the project in late April, complaining the regulatory process was slow and that it was being asked for too much by First Nations groups. The planned meeting with Deputy Prime Minister Anne McLellan, the Liberal government's senior minister on the Mackenzie Valley file, follows a meeting last Tuesday in Ottawa where Mr. Handley received support from Ms. McLellan for an undetermined injection of new cash. Ottawa will accept the $100-million figure as a starting point for discussions, said Alex Swann, a spokesman for Ms. McLellan. “If that's going to be what they come back with, in good faith, we pledge to focus on this,” Mr. Swann said. He added that the federal government would need to review what the money would be used for, no matter how large the fund. Three First Nations leaders met yesterday in Calgary with Mr. Handley, concluding that $100-million is roughly the amount needed to address social-economic concerns. In attendance were representatives of the Sahtu, the Gwich'in and the Inuvialuit. The Deh Cho — the fourth First Nations group along the 1,200-kilometre pipeline — were not in Calgary yesterday, but Mr. Handley hopes to get them on board as well. Deh Cho leaders, who could not be reached for comment, were in Yellowknife meeting separately with officials from Ottawa, discussing related issues. The $100-million figure is about 10 per cent of the Northwest Territories' annual budget of about $1-billion, of which about $800-million is supplied by Ottawa. Of the $100-million in new money, about $75-million would go to the territorial government and $25-million would flow to the four First Nations groups, Mr. Handley said. The four groups make up about two-thirds of the NWT's aboriginal population. Imperial Oil said it was too early to say anything about details but thinks the news is positive. “It's very early in the process but, obviously, it's encouraging,” said Pius Rolheiser, an Imperial spokesman. “We would all like to see the impasse resolved.” Challenges remain, said Richard Nerysoo, lead negotiator for the Gwich'in Tribal Council. Imperial and the First Nations groups still have to agree on access agreements so that the pipeline can traverse First Nations lands. Mr. Nerysoo said money from Ottawa would be “very, very helpful in dealing with the social-economic consequences of the project.” However, he said Imperial has to take a role too, beyond signing basic access agreements, which usually feature one-time rather than recurring payments. Mr. Nerysoo pointed to the need for improved municipal services in communities along the pipeline route. “Imperial needs to step up to the plate,” Mr. Nerysoo said. “It doesn't mean they're paying for all of it.” Access negotiations, which have been going on for more than a year, are stalled. Mr. Nerysoo said he believes Imperial has good intentions but that its approach seems heavy handed. The company plans to table a template access offer that is supposed to provide some uniformity, so that no one group feels it is getting less than the others. “Put it this way,” Mr. Nerysoo said, “I don't think anyone can just put something on the table and say, ‘This is the deal.' That's not reasonable.” He said negotiations were going fairly well before Imperial pulled the plug. The Mackenzie Valley pipeline is the largest industrial project ever proposed for the NWT and would connect major natural gas fields in the Mackenzie Delta with hungry markets in the south.

To: Dennis Roth who wrote (36)	6/20/2005 9:58:17 AM
From: Dennis Roth	Read Replies (1) \| Respond to of 570

Mackenzie Gas Project newcomers challenge senior firms' plans Industry duel became public when participants met June deadlines for filing written evidence Gordon Jaremko The Edmonton Journal June 20, 2005 canada.com A new conflict is erupting over the $7-billion Mackenzie Gas Project -- this time between rival industry factions. Appeals are being made to the National Energy Board for regulation to ensure the Northwest Territories is open to all natural gas developers. The project belongs to elder sisters of northern drilling that own Mackenzie Delta discoveries with pedigrees dating back 30 years or more: Imperial Oil, ExxonMobil Canada, Shell Canada and ConocoPhillips Canada (formerly Gulf). The senior firms' plans are being challenged by relative newcomers to exploration on the Delta and along the Mackenzie Valley. Companies fighting for open gas fields and pipelines include Mosbacher Operating Ltd., a drilling partnership of Apache Canada and Paramount Resources, and the Mackenzie Explorers Group of Anadarko Canada, BP Canada, Chevron Canada, Devon Canada, EnCana Corp., Nytis Exploration and Petro-Canada. After months of preliminary fencing in private, the industry duel became public as participants in the project's regulatory review met June deadlines for filing written evidence with the NEB. Board proceedings and northern environmental scrutiny continued after the project sponsors suspended field work in April to seek aboriginal land access and benefits agreements. Dates for oral hearings, the last step in the process, remain uncertain. Mosbacher told the NEB the project sponsors "have utterly failed to present plans that would optimize production of the underlying resource, minimize the ultimate (environmental) disturbance or respect the rightful economic interests of adjacent lands." The Delta production scheme takes a step backward to the "rule of capture," Mosbacher said. The firm was referring to a first-come, first-grab law of the jungle in the industry's pioneer era. Regulators and business leaders who saw more to be gained from orderly growth ended the dog-eat-dog approach decades ago in Alberta and offshore of the East Coast. Mosbacher says production plans for two of the Mackenzie project's three Delta anchor fields would drain gas from its holdings, which are geographically and geologically connected. To protect itself, the firm says it would have to embark on hasty, potentially wasteful development or else take defensive action such as drilling new wells to seal off its reserves that cost $30 million each on the Delta. Mosbacher urges the NEB to devise a northern counterpart to Alberta conservation regulation. The Alberta system -- created, tested and ultimately victorious against the rule of capture in epic 1930s political and courtroom battles -- takes a co-operative approach. Key features include "unitization," which requires majority and minority owners of gas pools to work out development and revenue sharing contracts. The seven-company explorers group seeks cuts in shipping tolls planned for the proposed Mackenzie Valley Pipeline and an ethics code to ensure all gas developers have equal access to delivery service. About $315 million in added facilities are also requested by the group, to give the pipeline built-in capacity for extra expansion beyond the needs of the Mackenzie project's owners. A forecast done for the explorers group by the geology and engineering consulting house of Sproule Associates suggests the project owners badly underestimate northern resource potential. The study calculates 56.4 trillion cubic feet of gas awaits new drilling in the Delta-Beaufort Sea region, or quadruple the official Mackenzie project estimate. The Sproule forecast says the area could sustain daily production of up to three billion cubic feet per day, or nearly double the maximum 1.8 billion anticipated by the current design. Apache and Paramount, in also appealing for improved access to the proposed Mackenzie pipeline and a favourable regulatory regime for independent firms, show big plans are riding on the northern project. The pair disclosed that over the past three years they spent about $140 million on a 10-well exploration program in a central Mackenzie Valley area known as Colville Hills. Connecting the resulting discoveries to the proposed pipeline will require up to $650 million in production, processing and transportation facilities, the partners say. Natural gas is turning in a stellar performance, show international trade scorecards kept by the National Energy Board. Both volumes and prices of exports to the U.S., which take about 60 per cent of Canadian production, increased during the last heating season. Deliveries during November through February rose by 8.5 per cent to 1.3 trillion cubic feet from 1.2 trillion in the comparable period of 2003-04. The average 2004-05 heating season price fetched by exports climbed 24 per cent to $6.44 US per thousand cubic feet last winter from $5.21 the winter before. Winter gas export revenues shot up by 34 per cent to $8.65 billion US in 2004-05 from $6.45 billion for the 2003-04 heating season. gjaremko@thejournal.canwest.com © The Edmonton Journal 2005