Canada's energy ministers expect early pipeline decisions; two pipelines likely
Canada's leading energy ministers emerged from Texas meetings this week with U.S. and Canadian gas producers certain that decisions on Arctic pipelines are imminent and could involve routes from both the North Slope and Mackenzie Delta.
But Terry Koonce, vice-president of Exxon Mobil Corp., cautioned against too much optimism, saying the tax and royalty rates in Alaska must be attractive and the regulatory approval process for a pipeline must be streamlined if development is to go ahead.
However, Canada's Natural Resources Minister Ralph Goodale told reporters Nov. 28 the industry expects to file an application for at least one line within six months.
“It's timely now to proceed with those projects,” he said. “The companies are doing their homework.”
Based on talks with company executives, Goodale said the North Slope and Delta producers indicated they will finish their internal analyses and make their decisions early in 2002. He said the discussions even extended to the prospect of two pipelines, which is “very much within the realm of possibility.”
Alberta Energy Minister Murray Smith agreed the Alaska and Mackenzie Delta producer groups are “ramping up to decision time. I don't think there is anybody in Canada or the United States who wants to see the opportunity go by. It is time.”
Koonce said the Alaska producers' study is focused on reducing the huge front-end costs.
“Current analysis does not show either of the routes is economic at the present time,” he told reporters in Dallas. “If we had fiscal certainty in Alaska and if we had a regulatory superhighway through the U.S. through legislation, all those factors would help. But no one of them guarantees that this one will be economic.”
A spokesman for Imperial Oil Ltd., which is 69.6 percent owned by ExxonMobil and is the lead partner in the Delta consortium, said that “before year-end 2001 (the Delta producers) hope to be in a position to begin work on regulatory applications.
“We've not made that decision yet ... but we're certainly encouraged by the progress that we've been making. Our hope is that before year-end we can announce that we're going to advance to the next stage, which would be the regulatory and project definition phase.”
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