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Aboriginals have cash deal for Mackenzie gas pipeline Imperial Oil chairman says pact reached with third party; no confirmation from Natives Gary Park Petroleum News Calgary Correspondent
Imperial Oil, which heads up the Mackenzie Delta gas consortium, has sent out the strongest signal yet that a financing deal has set the stage for aboriginal participation in the project.
Tim Hearn, chairman, chief executive officer and president of Canada’s largest oil company, said April 22 that the Aboriginal Pipeline Group has reached an agreement with an unnamed partner, widely speculated to be TransCanada PipeLines.
Hearn told reporters in Toronto that he received a copy of the agreement on April 21, but cautioned that he has not had time to examine the terms.
“My understanding is that negotiations with (the APG) and a third party, to my understanding, generally are complete,” he said.
APG chairman Fred Carmichael told the Financial Post that the negotiations are “ongoing.” Hearn optimistic Hearn expressed optimism that an agreement will allow the Mackenzie Delta Producers Group — Imperial (which is 69.6 percent owned by ExxonMobil), ConocoPhillips Canada, Shell Canada and ExxonMobil Canada (which is wholly owned by ExxonMobil) — to file a preliminary information package with regulators “fairly soon,” followed by a full regulatory application to the National Energy Board late this year.
He said the “window of opportunity to go ahead with Mackenzie gas is now.” Any delays would pose a “real challenge” in meeting a 2008 start-up date.
“I would like us not to take an extraordinary length of time trying to sort out arrangements between all parties,” he said.
However, Hearn cautioned that the terms of an APG deal must be consistent with the 2001 memorandum of understanding between the APG and the Delta producers’ group.
The memorandum provided the framework for aboriginal communities in the Northwest Territories to obtain a one-third interest in the proposed C$3 billion pipeline. Progress has been stalled Although the producers have been ready since October with their preliminary information package, progress has been stalled while the APG has sought C$70 million to cover its share of preparing the regulatory application.
In addition, to secure up to one-third ownership of the pipeline, the APG must negotiate supplies of 400 million to 500 million cubic feet per day of supplies from Mackenzie Delta and Mackenzie Valley discoveries that are incremental to the main producers’ group.
TransCanada PipeLines has kept tight-lipped about its possible role with the APG, which raises issues of diluting the APG’s interests and the influence a third party might have over the producers’ consortium, which owns 5.8 to 6 trillion cubic feet of Delta gas.
Earlier this month, federal Indian Affairs and Northern Development Minister Robert Nault said the approval process can be completed in 24 to 30 months from the time a final application is filed.
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