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Alberta studies northern alternative
Gary Park For Petroleum News
Alberta Energy Minister Ken Hughes has disclosed his government, in its desperate attempt to get landlocked oil sands bitumen to market, has spent C$50,000 exploring the feasibility of a pipeline from the province to Tuktoyaktuk on the shores of the Beaufort Sea in the Northwest Territories.
He told reporters “it might well be a very interesting conversation” with the NWT government about opening a northern route to markets in India and China.
Calgary-based consulting firm Canatec Associates was hired earlier this year to conduct the research and deliver its findings this fall, an Alberta government spokesman confirmed.
“The idea is to see whether it’s a viable option to ship bitumen products up through the north,” he said.
The northern alternative is part of a push by Alberta and the industry to find ways around opposition to projects such as Keystone XL, Northern Gateway and the Trans Mountain expansion, with the spotlight shifting to West-East pipelines to access refineries in eastern Canada and the U.S. and shipments by rail to a the Port of Churchill in Manitoba’s Hudson Bay.
Hughes noted there is already an under-utilized Enbridge pipeline from Norman Wells in the Central NWT to Zama in northern Alberta.
In 2014, the NWT is expected to complete a devolution deal with the Canadian government to take control over its resource development, acting as a spur to oil exploration in the Central Mackenzie Valley by Husky Energy, ConocoPhillips, Shell Canada and MGM Energy, putting the NWT government in the same position as Alberta in hunting for ways to establish links to new markets.
Dredging required Doug Matthews, an energy consultant who has worked with northern governments over the past 25 years, told the Daily Oil Bulletin that although the Tuktoyaktuk harbor is relatively deep, the Beaufort is shallow and approaches are in shallow water.
Carrying large volumes of crude out of the port would require considerable dredging or the construction of a 12-mile pipeline to a point where large tankers could anchor for loading, he said.
“If one were a prospective NWT producer it would be a good news story because then you could get your oil into this Alberta-funded pipe.
“Having said that I think the technical challenges are pretty big and the political challenges are big. We don’t build pipelines with ease in the Northwest Territories,” Matthews said.
Hughes said the Port of Churchill option is still under study as a prospective outlet for diesel fuel, once the province has a surplus, likely from the North West Redwater Partnership that is working on a refinery to initially convert 50,000 bpd of bitumen and expand to 150,000 bpd.
He said the objective is to do some research and “get the response back as early as we can and see if it’s worthy of more research.”
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