Doug Ashbury
Northern News Services

NNSL (Sep 20/99) - It is now economically feasible to draw natural gas from the Mackenzie Delta-Beaufort Sea region, according to an industry report.

"Based on the scenario analysis of supply, demand, pricing fundamentals, and the cost of developing this resource, it appears that such an undertaking could be feasible under a wide range of plausible circumstances," Roland George said in a release.

George, the study's principal author is with Calgary-based energy consultants Purvin & Gertz.

He adds that despite the economic feasibility of getting the Delta's gas to market, "there are major problems commercializing this new source of gas."

Several factors have recently combined to dramatically increase the interest expressed by producers and pipelines in this promising new natural gas resource.

"At 64 trillion cubic feet, the potential natural gas resource base in the Mackenzie Delta/Beaufort Sea area can definitely underpin major upstream and pipeline development," George said. But, he adds, finding and development costs are likely to be higher in the Delta than in Western Canada. The Purvin & Gertz study suggests separate natural gas and liquids pipelines.

The firm came up with three development scenarios. The fastest option suggest natural gas could be flowing by 2007.

Commercially, Purvin & Gertz suggest a consortium is likely the best method to tackle the financial aspect -- such a pipeline would likely cost several billion dollars to build -- of getting gas from the Delta south to market.

Such a move would reduce costs and risks, the firm said. Despite the "extensive" development time, the firm adds that none of the technical, logistical, regulatory and resource management challenges are insurmountable.