Over the top from the Mackenzie Delta?

Some years ago both the Alaska state government and the U.S. federal government passed legislation banning the construction of a gas pipeline from the North Slope east to the Mackenzie Delta for the export of natural gas from the North Slope through Canada. This so-called “over-the-top” route had earlier been a serious contender in the various shipping options considered for North Slope gas, but U.S. lawmakers viewed a route bypassing most of Alaska and the United States as not being in the United States’ best interests.

But those government prohibitions would not apply to a gas line carrying Mackenzie Delta gas east to west for transportation down a future North Slope gas line, Harold Heinze, CEO of the Alaska Natural Gas Development Authority, pointed out during a Sept. 28 talk that he gave at the Alaska Oil and Gas Congress. With continuing delays in plans to build a Canadian pipeline south from the Mackenzie Delta, the east-to-west route through the shallow waters of the Beaufort Sea is perhaps worth considering, he said.

Heinze later told Petroleum News that, with the Mackenzie Delta region having a smaller gas resource than the North Slope, Mackenzie gas could enjoy economies of scale in using a North Slope gas line and that the environmental impacts of winter pipeline construction in the shallow water of the Beaufort Sea would be minimal.

On the other hand, Harvie Andre, once head of ArctiGas, a company interested in developing the over-the-top route for North Slope gas, expressed skepticism about shipping Mackenzie gas through Alaska. The shipping cost along the gas line west to the North Slope would render the Mackenzie gas uncompetitive with North Slope gas, Andre said. Additionally, there would be significant environmental opposition to laying a gas line in the sea north of the Arctic National Wildlife Refuge, and any government subsidy for a North Slope gas line would present political problems in shipping Canadian gas, he said.

And Pius Rolheiser, spokesman for Imperial Oil, the operator for the Mackenzie Gas Project, told Petroleum News that, despite regulatory delays, Imperial still views a Mackenzie Valley pipeline as the best option for commercializing Mackenzie gas.

“We very much remain committed to the project and think it can be a commercially viable project,” Rolheiser said.

—Alan Bailey