First Nation tests petroleum waters

Gary Park

For Petroleum News

An Alberta First Nation is taking steps to become an influential player in the petroleum industry, forming a joint venture with a Chinese company to develop its oil and gas resources and challenging an asset swap involving two major pipelines.

The Stoney Nakoda First Nation, which is located 40 miles west of Calgary, signed an agreement July 28 with Hong Kong-based Huatong Petrochemical Holdings to explore and develop oil and gas deposits on 120,000 acres of reserve land.

Huatong will provide the necessary financial backing - which could run to hundreds of millions of dollars - and Nakoda Oil & Gas will become the primary operator of the JV.

“The magnitude of this agreement ... will hopefully bring us one step closer to self-sufficiency for our nation and people,” said Bruce Labelle, chief of the Chiniki Nation, one of the Stoney Nakoda communities.

Large volumes of natural gas have been processed over more than 60 years at the Jumping Pound plant on the Stoney Nakoda land. Separately, the First Nation is seeking to apply a recent landmark Supreme Court of Canada verdict to complicate a pipeline deal that includes an asset swap between the TransCanada unit Nova Gas Transmission and ATCO Pipelines.

As an intervener at a National Energy Board hearing into the asset exchange, the Stoney Nakoda are demanding that an ATCO pipeline that runs through their land from Calgary to Banff, but is not part of the proposed swap, should be transferred to TransCanada, bringing it under NEB jurisdiction, not the Alberta Utilities Commission, which regulates ATCO pipelines.

The asset swap, which involves C$170 million of assets, has been in the works for five years.

If approved, it would allow the pipelines to operate under a single set of rates and services, cutting costs for the companies.

The Stoney Nakoda is contesting the transaction, claiming compensation for alleged breaches of aboriginal title and rights by the governments of Canada, Alberta, British Columbia and Saskatchewan, as well as the NEB.

The Supreme Court ruling in June makes it easier for the Stoney Nakoda to establish title over lands that were used for hunting, fishing and other activities before contact with European settlers.

The court requires governments to justify economic development on aboriginal land.

Nova Gas argues the asset swap would not have any physical impact on the Stoney Nakoda because no new facilities are being constructed. It also said the Stoney Nakoda have provided no evidence that the pipelines are on traditional land.