Jack Danylchuk
Northern News Services

Yellowknife (Sep 12/05) - Already a year behind its original timetable, the Mackenzie Gas Project will reach a critical point this week.

Proponents of the $7 billion project will announce this if they are ready to begin 16 months of hearings early next month before the National Energy Board and the joint environmental review panel.

"There are still a number of outstanding issues that need to be resolved prior to us being ready to take the next step," Pius Rolheiser, a spokesman for Imperial Esso, said last week.

Benefits and access agreements - the same issues that brought the project to a halt in April when Esso accused First Nations of demanding too much, are still unresolved, as are royalties for the territorial government.

Ottawa stepped in with a promise of $500 million for social impacts in communities on the pipeline route, and found $31.5 million for Dehcho First Nations to end a legal challenge that threatened to mire the project in the courts.

"We're very encouraged by progress over the summer," Rolheiser said, as Imperial entered meetings in Calgary with government and First Nations negotiators, "but we're not there yet."

The lack of a definitive answer is creating uncertainty among investors and developers, especially in Inuvik.

"It will be a gloomy winter," said Sam Kassem, president of Northern Management Development Ltd., noting that most exploration companies have put their Mackenzie Delta plans on hold.

Kassem scaled back a housing development to 20 units from 24 in response to the cautious mood that has overtaken the town.

"Nobody is building and nobody is buying," he said.

Imperial met again last week in Calgary with negotiators for First Nations, but there was no word from either side on what progress, if any was made.

The company was offering one-time payments to the four settlement areas.

Keyna Norwegian, chief of the Dehcho First Nation, said there is "no way we'll accept a one-time payment."

More than 40 percent of the pipeline crosses Decho land. It would receive $16 million a year under a proposal developed by Stephen Kakfwi, former premier and negotiator for the K'Asho Got'ine Dene of Fort Good Hope.

Kakfwi is proposing a toll on the pipeline for crossing First Nations land that would amount to $40 million a year for aboriginal governments on the pipeline route.

The Aboriginal Pipeline Group's Fred Carmichael worries that the combined demands of the territorial government and First Nations could kill the pipeline.

The Aboriginal Pipeline Group, a First Nations consortium with a one-third stake in the project, estimates that it will generate $40 billion in business activity, $32.9 billion of that in the Northwest Territories.

At the peak of construction, the project will employ 2,600 on the pipeline and pumping station.

Once complete, it will need 100 full-time people to run the system that will deliver 34 million cubic metres of gas a day.