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Providing coverage of Alaska and northern Canada's oil and gas industry
August 2009

Vol. 14, No. 31 Week of August 02, 2009

Yukon watches, waits, hopes for pipeline

Canadian territory has potential onshore, offshore natural gas; development dependent on connection to larger line, or to mines

Gary Park

For Petroleum News

Caught between two spluttering, multibillion-dollar natural gas pipeline projects out of Alaska and the Mackenzie Delta, Canada’s Yukon Territory’s hopes of becoming energy self-sufficient and also shipping its potential natural gas and oil resources to southern markets are stalled.

For now, it has no real choice but to wait for progress on the Arctic pipelines while it sits on a potential treasure-trove of potential resources — 17 trillion cubic feet of gas and 800 million barrels of oil onshore and 40 tcf of gas and 4.5 billion barrels of oil offshore.

While the waiting game drags on, junior explorer Northern Cross (Yukon) keeps adding to its land holdings, making a successful work bid of C$457,000 for rights in the Eagle Plain basin of northern Yukon.

Northern Cross is already the outright owner and operator of 1.3 million acres and holds three federal Significant Discovery Licenses from four wells drilled in the 1960s.

Although those wells fell short of commercial production status, the licenses have no expiry date.

Northern Cross also holds a number of permits which are now in the second of a six-year commitment and, provided it can raise financing, plans to drill some over the next six to 12 months.

Eagle Plain prospective

Eagle Plain, rated the largest prospective basin in the Yukon, has an estimated 6 tcf of gas and 436 million barrels of oil.

Although Northern Cross President Brian Avery has suggested that if enough gas is discovered, it might be possible to build a standalone pipeline from Eagle Plain to Fort Nelson, in northern British Columbia, analysts at Ziff Energy Group doubt a route across rugged terrain would be economically viable unless several more trillions of cubic feet are added to the Yukon’s resources.

The best bets have traditionally been seen as a spur line tying into a Mackenzie Valley pipeline, or a tie-in with an overland pipeline from Alaska across the southern Yukon.

Otherwise, the best bet is to supply gas to meet the energy demand of the Yukon’s mining industry — an option Avery estimates would be workable if exploration discovers 250 billion to 500 billion cubic feet.

The Yukon government recently issued its own energy strategy which said that developing the territory’s own oil and gas resources would reduce dependence on imports.

Currently 76 percent of energy consumed in the Yukon is from refined petroleum products and all fossil fuels used in the territory are imported.






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