March 07, 2003 --- Vol. 9, No. 25March 2003

NWT-Yukon close to Mackenzie Valley pipeline pact

A deal is in the works that could see natural gas from the northern Yukon feed into a Mackenzie Valley pipeline, ending an often bitter feud between the Yukon and Northwest Territories governments.

Northwest Territories Premier Stephen Kakfwi told an Arctic gas symposium in Calgary March 6 that the two territories will sign a memorandum of understanding this month to cooperate in ensuring there is capacity on the Mackenzie Valley system to handle any gas that might be produced from the Eagle Plains and Peel Plateau regions of north-central Yukon.

Kakfwi said a “new era of collaboration” has taken shape since the election in November of Dennis Fentie as Yukon premier, replacing Patricia Duncan who frequently clashed with Kakfwi over whether a Mackenzie Valley or Alaska Highway pipeline should get priority.

Roland George, a consultant with Purvin & Gertz Inc., told the conference that with the economics now placing construction of a Mackenzie Valley clearly in the lead there is no longer a competitive situation.

He said the discussions now seem headed in a “positive” direction that gives the Yukon an option for developing its gas.

If northern Yukon leaseholders such as Devon Canada Corp., Petro-Canada and Hunt Oil Company of Canada Inc. can establish reserves, currently estimated at about 3.3 trillion cubic feet in Eagle Plains and Peel Plateau, observers believe they could contribute 200 million cubic feet per day to a Mackenzie Valley pipeline.

There has been no discussion yet with the Mackenzie Delta Producers Group, led by Imperial Oil Ltd., over building a pipeline connection from the Yukon to the Mackenzie Valley.

However, Hunt senior geologist Christopher Wickens said last year that his company could work with either a link to the MacKenzie Valley or one to the proposed Alaska Highway pipeline as it crosses through the southern Yukon.

He said Hunt believes it has identified some “significant (gas) potential” in its Yukon leases, which have gone unexplored since the late 1970s.

Michel Scott, vice president of frontiers for Devon Canada, told the Calgary conference that the prospect of a pipeline from the Yukon is encouraging for his company which is the dominant license-holder in Eagle Plains.

He endorsed the concept of making a Mackenzie Valley pipeline as “expansion friendly as possible.”

This news bulletin has been corrected. An earlier version incorrectly referred to a link between the northern Yukon and Mackenzie Valley as the Dempster Lateral. In fact, the Dempster Lateral is a 1970s proposal to ship Mackenzie Delta gas across the Yukon to connect with an Alaska Highway pipeline.

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