Thorunn Howatt
Northern News Services

Hay River (Sep 16/02) - ConocoPhillips' new Hay River office is helping keep a toe-hold on a proposed Mackenzie Valley pipeline. With one foot in Alaska and another in the NWT, the company is covering all its bases.

"We back development of both basins as well as both pipelines," said ConocoPhillips' Dan Baillie, referring to competing energy development in both Alaska the NWT. He was in Hay River last week for the grand opening of the new office.

Alaskan and NWT groups are both campaigning for their own pipeline, built to carry Arctic natural gas southward. Proponents from both sides have argued to have their pipe built first -- connecting their gas fields to markets. In the past, Phillips backed an Alaska Highway proposal but Conoco was a strong voice on the Mackenzie Delta Producers' Group.

They want to build a gas line down the Mackenzie Valley along with one-third partner the Aboriginal Pipeline Group.

Conoco raised curiosity about its pipeline position after its proposed merger with Phillips Petroleum last November. Phillips has oil and gas reserves on Alaska's North Slope while Conoco claims Mackenzie Delta reserves. The Conoco-Phillips $15 billion union has been complete for only a few weeks.

The new company thinks the Mackenzie line will go first -- by 2008 -- with the Alaskan line following by 2011.

But there is one hold-up.

The Aboriginal Pipeline Group (APG) wants ownership in the Mackenzie Valley line but it's having trouble coming up with the cash.

"We want them to be a full-fledged player," said Baillie. The APG is in the process of trying to secure loan guarantees for its portion of the proposal.

Even with the help of ex-Alberta premier Peter Lougheed things are moving at a snail's pace.

"It seems to be stalled," said Baillie, adding that new questions could arise if the APG money plan falls through.

"We absolutely need aboriginal support," he said but added there is a possibility of funding the aboriginal group through other methods.

The all-Canadian Mackenzie route is expected to cost a little over $3 billion while an Alaska Highway project has been estimated as high as $20 billion.