NWT launches Valdez trial balloon for moving Canadian oil to Asia

Northwest Territories Industry Minister David Ramsay has reopened debate on an option for moving crude from the Alberta oil sands and Canadian Arctic to Asia by way of Valdez.

He told Petroleum News he is in the early stages of exploring the possibility with political leaders in Alberta, the Yukon and Alaska

The routing is viewed by the NWT government as a chance to deliver crude to Asian markets by avoiding the opposition that faces proposals by Enbridge and Kinder Morgan to build the Northern Gateway and Trans Mountain expansion across British Columbia and to take advantage of underutilized capacity on the trans-Alaska oil pipeline.

In Houston for the Offshore Technology Conference, Ramsay placed the idea on the table with Alaska Gov. Sean Parnell and is hoping for a follow-up meeting in August.

“We will get some work done by the NWT government and industry to explore the viability of this option,” he said.

Ramsay said meetings have also been held with the Alberta government which is anxious to break out of its landlocked position and encourage growth of the oil sands, noting that Alberta has also joined the NWT in studying the possibility of running a crude pipeline from the oil sands and north along the Mackenzie River Valley to a deepwater tanker port at Tuktoyaktuk on the Arctic Ocean.

He suggested a pipeline to Valdez would extend north from the oil sands to the closely watched Canol shale play in the Central Mackenzie Valley, then connect with the trans-Alaska oil pipeline.

Ramsay said the system might also pick up crude on a spur line from the Canadian Beaufort where Chevron Canada, Statoil and a partnership of Imperial Oil, ExxonMobil and BP have secured exploration rights through C$2 billion (US$1.99 billion) in work commitments, with no plans for how to get any crude they find to market.

The Alberta government hired consulting firm Canatec Associates International in April to assess the feasibility of the Tuktoyaktuk option and said it was in “serious discussions” with the NWT because of the “immense resources” in Canada’s Arctic.

—Gary Park