Mackenzie Delta consortium hires engineering firm

Gary Park, PNA Canadian correspondent

Mackenzie Valley gas producers gave another strong indication of their desire to proceed with development by awarding a contract for conceptual and preliminary engineering that will claim a large chunk of the budget for the project definition phase.

The job has gone to Calgary-based ColtKBR, a long-time joint venture of Colt Engineering Corp. and Kellogg Brown & Root, the wholly owned subsidiary of Halliburton Co.

The joint venture said May 17 that the engineering work will help to optimize the commercial viability of the Mackenzie Valley project and support the development of regulatory applications.

A spokesman for Imperial Oil Ltd., the lead partner in the Mackenzie Delta Producers Group and 69 percent owned by ExxonMobil, indicated that the contract will use up a significant portion of the estimated C$200 million to C$250 million allocated in January to the project definition stage.

That process is expected to take three to four years, but Delta producers hope to file their initial application with regulators in the second half of 2003.

“I think it is an important step and indicative of the momentum and the progress we are making,” he said. “We’re putting all the pieces in place.”

K.C. Williams, senior vice president of Imperial, speaking on behalf of the producers’ group and Mackenzie Valley Aboriginal Pipeline Corp., that awarding the contract “marks another significant step towards the preparation and filing of regulatory applications.

“As the producers’ group and MVAPC continue to move forward, we will ensure the project remains focused on safety, care for the natural environment and technical quality, as well as the owners’ shared objectives for aboriginal and northern involvement,” he said in a statement.

Russ Grant, vice president of ColtKBR, said the contract involves design and cost estimates for the pipeline, which carries a projected cost of C$3 billion, with another C$1 billion expected to go towards field development.

He said ColtKBR intends to sub-contract part of the work to aboriginals as part of the project’s goal of contributing to northern development.

The study and design will cover routing of an 800-mile main line from the Mackenzie Delta down the Mackenzie Valley to northwestern Alberta where it would feed into the existing pipeline network. The work would also include associated facilities, such as compressor stations, a natural gas liquids recovery facility at Norman Wells and gathering lines, along with temporary facilities to support the construction phase.

The Delta producers — Imperial, Shell Canada Ltd., Conoco Canada Ltd. and ExxonMobil Canada — are considering initial shipments of 800 million to 1 billion cubic feet per day, with the MVAPC adding up to 500 million cubic feet per day drawn from other Delta and Valley discoveries.