Canada's Natural Resources Minister Herb Dhaliwal has emphatically ruled out any federal government loan guarantees to support Native ownership of a Mackenzie Valley gas pipeline, but insists that other options are available.
"The government's current position is we don't finance pipelines and we don't fund loan guarantees," he said Nov. 14 in a conference call from India, the second time this week he has dashed Aboriginal Pipeline Group hopes of a C$70 million loan guarantee.
"There are other proposals I am aware of," he said, suggesting the APG could fund a one-third ownership of the pipeline once the project was completed at which point it "would be easier to get private funding."
Dhaliwal said that option would hinge on whether the Mackenzie Delta Producers Group, the lead player in plans to develop Delta gas and ship it to southern markets, builds the pipeline itself or turns that job over to a private company.
Nellie Cournoyea, former chair of the APG, told the Calgary Herald the group is still counting on a loan guarantee to facilitate its involvement in the design and engineering phases.
She accused Dhaliwal of "shooting from the hip," adding that the minister has yet to discuss any of his ideas with the APG.
Dhaliwal reiterated that he believes the APG has an important role to play in the pipeline project, but said the next step would depend on the recommendations of Roland Priddle, former chairman of the National Energy Board who is the government's chief negotiator with the APG.
A spokesman for Imperial Oil Ltd., which heads the Delta producers' group, said the case has been made to Priddle and other federal officials that aboriginal support for a pipeline is essential before the project can proceed.
In the meantime, he said a strong summer response from E&P companies outside the producer consortium has prompted the Delta producers to design a pipeline that could be expanded to 1.9 billion cubic feet per day from 1.2 billion cubic feet per day.
