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Yukon presses case for access to natural gas markets Concerned that the design of the Mackenzie gasline project does not allow for gas from Yukon’s under-explored basins, Kent tells producers, Canadian government that pipeline link from territory’s gas fields is critical to area’s economic health Gary Park PNA Canadian Correspondent
The Yukon government is determined that its fledgling natural gas industry should not be bypassed by major pipelines from Alaska’s North Slope or the Canadian Arctic.
Energy, Mines and Resources Minister Scott Kent delivered a letter July 26 to Imperial Oil Ltd., the lead partner in the Mackenzie Delta Producers Group; the Canadian government; and Canada’s National Energy Board drawing attention to the risk of stranding Yukon gas and to the opportunity for delivering gas from north-central Yukon to a Mackenzie Valley system.
He said Yukon access to pipelines “is a critical requirement for the Yukon’s oil and gas industry and for the economic well being of the Yukon.”
Kent said the Peel Plateau and Eagle Plain basins, where gas reserves are currently estimated at 3.3 trillion cubic feet, have sufficient gas potential to warrant a connection to any Mackenzie Valley connection to southern markets. Interests of permit holders could be compromised The letter was written following discussions with Yukon permit holders, whose interests Kent fears could be compromised if access to a Mackenzie Valley pipeline is ignored because the design of the project does not take into account the resource potential of the territory’s under-explored basins.
Eagle Plain has logged three significant discovery licenses and has estimated potential resources of 1 trillion cubic feet of gas and 28 million barrels of oil.
Peel Plateau, despite limited exploration, has recorded gas shows from several wells and, according to the National Energy Board, has estimated potential of 2.3 trillion cubic feet of gas and 21 million barrels of oil.
Since control of the Yukon’s oil and gas resources was transferred to the territory from the federal government in 1998, three land sales have taken place and a fourth is planned for this year.
Results have been only modest, with Anderson Exploration Ltd. (since acquired by Devon Energy Corp.) bidding a total of C$23.3 million in work commitments for Eagle Plain and Hunt Oil Co. of Canada Inc. submitting the winning bid of C$1.16 million for a parcel in the Peel Plateau area.
Hunt senior geologist Chris Wickens said at the time of the sale that his company could work with either an Alaska Highway or a Mackenzie Valley pipeline. Dempster an ANGTS option From its beginnings in the 1980s, the Alaska Natural Gas Transportation System, promoting the Alaska Highway route, has included an option known as the Dempster Lateral which would link fields in the Mackenzie Delta, Beaufort Sea and Yukon with the mainline as it crosses through the southern Yukon.
Reinforcement of the Yukon’s desire not to be overlooked came in a report earlier this year by Infometrica Ltd., an Ottawa-based economic consulting firm.
It said construction of an Alaska Highway system would likely spur development that might not otherwise occur in the Yukon and northern British Columbia.
“Since Yukon gas fields are largely undeveloped, an inexpensive means to market may allow further progress,” said the paper.
But the only current producing field in the Yukon is the Kotaneelee field in Liard Plateau in the southeastern corner, where two wells are yielding 60 million cubic feet per day for shipment to Fort Nelson, British Columbia.
David Thompson, president of Northern Cross (Yukon) Ltd., which owns the three discovery licenses in Eagle Plain, said July 26 it is important that Yukon interests are well represented in any process that leads to pipeline development across northern Canada.
He said previously that the gas potential could be large enough, in conjunction with development of gas in the Mackenzie Valley and possibly Prudhoe Bay, for the Yukon to be one of the sources of supply for a large-scale pipeline to southern Canada and the Lower 48.
The important consideration is infrastructure development, the timing of which is “critical for anybody exploring in the north,” Thompson said.
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