Derek Neary
Northern News Services

NNSL (Sep 24/99) - Paramount Resources Ltd.'s proposed 200-kilometre gas pipeline near Fort Liard has been at least temporarily set back by the failure to obtain permits through the Department of Fisheries and Oceans.

"It's throwing the project into some jeopardy. In fact it's getting pretty serious," said Hugh Klaassen, corporate compliance officer for Paramount. "We have been told in no uncertain terms that unless we get some further delineation wells down by Christmas to prove up these reserves, the project would not be going."

That would affect the Acho Dene Koe, who would lose out on the service sector work and had hopes of going joint-venture on the pipeline. Klaassen was in Fort Liard Monday, to discuss the issue with representatives of the Liard band. Paramount has also expressed interest in using associated fluids to help lower the power costs in Fort Liard, he noted.

Karen Ditz, the area habitat biologist with Fish Habitat Management, said Tuesday that she would be in Fort Liard on Wednesday to meet with Paramount officials on the issue.

"We're going to talk about some of the specific designs of some of the water crossings they're doing in that area," said Ditz, adding that more information is needed to ensure fish habitat isn't disturbed, or at least kept to a minimum.

Paramount has permits to build a 24-kilometre access road, which would allow them to construct four delineation wells. The original discovery well, F-36, is expected to be able to flow at 20-25 million cubic feet per day, according to Klaassen. The delineation wells would provide an even greater volume of gas each day to make the project viable, he explained.

"We could then support the economics of spending the next $150 million on the project to build the pipeline and the associated plants," he said, adding that alternatives are being sought. "The federal government is losing about $77 million per year in taxable money. I mean, we're not going to get turned off but it will leave a very sour taste in a everyone's mouth here."

According to Klaassen, Paramount had been hoping to have the permits by August. The company has already committed to purchasing some pipe and compression equipment, he noted.

"If it's not going to happen, then we're going to be left holding the bag and we're going to have to get rid of the stuff," he said. "We sort of stuck our neck out a long ways..."

Ditz said she anticipates that the situation can be worked out as long as Paramount is flexible.

"And they have been very willing to do that," she added.

This isn't a routine obstacle for a company like Paramount, Klaassen said. The process is considerably different in the south.

"The regulatory process (in the North) is much less predictable, let's say... the window of opportunity is small enough as it is because of weather factors out there. This just makes it a very frustrating process," he said.