New aboriginal pipeline proposal surfaces in NWT

Gary Park

The Arctic gas line picture in Canada has been blurred even further, with the emergence of a new aboriginal group bidding for native ownership of the delivery system.

The North American Aboriginal Pipeline Corp., based in Fort Simpson, Northwest Territories, surfaced Oct. 12 with plans to seek financing for an “over-the-top” pipeline that would be 100 percent owned by aboriginals.

The corporation estimates it will need to raise $6 billion to build a line from the North Slope, under the Beaufort Sea to the Mackenzie Delta, then down the Mackenzie Valley into Alberta.

Foothills Pipe Lines Ltd. has projected the cost of an “over-the-top” system at $13 billion, while Enbridge Inc. CEO Patrick Daniel has figured the cost at closer to $7 billion.

Walter Blondin, a spokesman for the North American Aboriginal Pipeline Corp., said the corporation — backed by two Metis development corporations and 15 businesses along the Mackenzie Valley — would issue bonds in much the same way money is raised for municipal projects.

The strategy mirrors that of Houston-based Arctic Resources Co., that also promises 100 percent aboriginal ownership of an “over-the-top” pipeline, using the shipping tolls to pay back the bondholders.

The ARC proponents have calculated that tolls could generate C$100 million to C$150 million a year in profits for the pipeline owners and deal brokers.

Blondin conceded the North American Aboriginal Pipeline Corp. has yet to have any discussions with North Slope or Mackenzie Delta producers.

The Delta producers have already given a strong indication they would be unlikely to support sole aboriginal ownership, arguing that managing the risk requires enough producer ownership of a pipeline to control costs and guarantee access to the line.

But Blondin said he was confident the producers would listen to North American Aboriginal Pipeline Corp.’s proposal because “they’ve got to cross our land. We’re not going to block them, but we’re saying ‘Do the responsible thing.’”

The Aboriginal Pipeline Group, representing 75 percent of the residents along the Mackenzie Valley route, favor one-third aboriginal ownership of a pipeline from the Delta in an agreement with the Delta producers.

So far, only the Sahtu First Nation has shown any desire to participate in the ARC venture, although the Deh Cho First Nations have refused to join sign an agreement between the Aboriginal Pipeline Group and the Delta producers’ consortium.