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Fall in gas prices brings reality to Arctic gas debate Northwest Territories Energy Minister Joe Handley says price crash has eased pressure to speed up pipeline development, without hurting the “viability” of the Delta Gary Park PNA Canadian Correspondent
Northwest Territories Energy Minister Joe Handley believes this year’s tumble in natural gas prices improves the chances of shipping gas from the Mackenzie Delta by 2007 — sooner than the most optimistic target for the North Slope.
In Calgary last week to speak to the Rotary Club, he said the crash in prices this year has injected a dose of reality into the debate over Arctic development.
“I don’t think it has hurt the viability of our project (delivery of Delta gas down the Mackenzie Valley) and I doubt that gas will go a lot cheaper, to the point where it’s going to hurt us,” said Handley.
He said this year’s average price of about C$5.91 per gigajoule, compared with C$16.95 a year ago, has eased the pressure on the Northwest Territories government to accelerate the pace of pipeline development.
“With a population of only 42,000 people and only a small government there’s only so much we can handle,” he said.
Handley also said the controversial issue of a pipeline from the North Slope under the Beaufort Sea and down the Mackenzie Valley has been moved from the spotlight as the Northwest Territories deals only with the development of Delta gas.
Alaska gas would delay Mackenzie He openly concedes that if the North Slope gets to market first “our options are grim. The amount of gas that Alaska puts out would meet the market demand for a long time. I would say that we would be set back by possibly 10 years or more.”
On the other hand, the smaller Delta volumes, even if they came on stream first, would not necessarily deter Alaska from bringing its reserves into production.
But, in the view of analysts, the new twist comes with the proposed Phillips Petroleum Co. merger with Conoco Inc.
Conoco, which acquired Gulf Canada Resources Ltd. in July and with it a sizeable chunk of the Delta reserves, now has the challenge of persuading Phillips to support the pledge by Conoco chairman Archie Dunham to aggressively promote Delta development.
Handley indicated that his best hope now is that Phillips will pay closer attention to how the Northwest Territories could fit into its plans for the North Slope.
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