Arctic Resources Ltd., widely rated as the long-shot among the Arctic gas pipeline options, is about to test the regulatory waters with its "over-the-top" proposal.
The Houston-based company has scheduled a news conference for Wednesday in Calgary to announce the filing of a preliminary information package covering the Canadian portion of the project.
The announcement of Arctic Resources' intention to file with Canada's National Energy Board will be made by Arctigas Resources Canada, whose president is Harvie Andre, a former federal cabinet minister in Canada.
Arctic Resources, with Forrest Hoglund as chairman and chief executive officer, surfaced in late 1999 with its scheme to build a pipeline from the North Slope under the shallow waters of the Beaufort Sea to the Mackenzie Delta, where it would link up with Delta gas shipments along the Mackenzie Valley.
From the outset the idea was been opposed by the Alaska and Yukon governments and scorned by environmentalists, who have argued that two subsea lines would be needed in the event of a rupture during winter.
But a Canadian Energy Research Institute study commissioned by the Northwest Territories government in 2000 said that of several potential pipeline routes an "over-the-top" project carrying 4 billion cubic feet per day would result in the lowest pipeline tolls and highest producer revenue due to a lower capital cost than an Alaska Highway system.
Andre has repeatedly said Arctic Resources won't back down from lobbying the Northwest Territories government and offering Northwest Territories aboriginals 100 percent ownership of a pipeline across their land.
He said that could be achieved by issuing bonds, using the proceeds to build the pipeline. Tolls from transporting the gas would pay back the bondholders and generate up to C$150 million a year in profits for the pipeline owners and Arctic Resources for setting up and managing the deal.
Andre claimed last year that "companies are lining up to buy. The major Wall Street bankers have indicated this is the kind of project they would and could be interested in financing."
Although Arctic Resources has taken a low-key stance recently, Arctic analysts suggest last week's decision by the Mackenzie Delta Producers Group to embark on a regulatory application might have reopened a window on the "over-the-top" line, which they say would make economic sense if a Mackenzie Valley pipeline was already in place.
