Doug Ashbury
Northern News Services
Yellowknife (Nov 27/00) - If Alaska's North Slope natural gas has to go through the Yukon to get to market, somebody better tell the "big three."
BP, Phillips Petroleum and Exxon, which combined hold about 90 per cent of the 35 trillion feet of proven natural gas reserves on Alaska's North Slope, continue to examine two pipeline options when it comes to getting gas to market.
Producers are not only looking at a potential Alaska-Yukon pipeline route but also the proposed 'over-the-top' link to a potential Mackenzie Valley pipeline, said Ken McDonald, BP's director of government and regulatory affairs.
"We'll focus on the southern route and the Northern offshore route," John Carruthers, BP's director of Northern pipeline development, said Thursday at the NWT's annual Geoscience Forum in Yellowknife.
Prime Minister Jean Chretien recently told Yukoners that North Slope natural gas has to go through the Yukon because of treaties signed in the 1970s. His comment, made in Whitehorse, sparked concern in the NWT.
The Northern route involves moving gas via an off-shore pipeline to the Mackenzie Delta where it would tie in with the proposed Mackenzie Valley pipeline.
The Government of the Northwest Territories recently commissioned a pipeline options study which concluded an offshore Alaska link with a Mackenzie Valley pipeline made the most economic sense.
As for BP, Carruthers said "we haven't made up our mind" when it comes to which route the company favours.
Known gas reserves on the North Slope are 35 trillion cubic feet (equivalent to six billion barrels of oil) and could be as high as 100 trillion cubic feet.
Resource companies know this because they have already pumped it once. The gas is reinjected into the ground to keep oil field pressure up.
Known Mackenzie Delta reserves stand at nine trillion cubic feet with a potential reserve of 64 trillion cubic feet. When asked about Chretien's comments, Canadian Association of Petroleum Producers President Pierre Alvarez, speaking at a Yellowknife Chamber of Commerce luncheon last Thursday, said: "I think everybody was surprised."
Alvarez suggests work will continue on all fronts and companies are not likely to roll up and head for the Yukon and Alaska just yet.
Ultimately, producers will decide what makes the most economic sense, he said. Companies own the rights to the resources, "not governments," he said.
That was a sentiment echoed by incumbent Western Arctic MLA Ethel Blondin-Andrew.
She blamed the news media for misinterpreting what Chretien said as support for just a Yukon pipeline.
"The Prime Minister called me and told me that he totally, 100 per cent supports the development of Canadian Arctic gas," she said.
Even so, territorial Economic Development Minister Joe Handley wants to hear it for himself.
He called Chretien's office, but as of Friday had yet to hear back.
"There hasn't been any clear position from the federal government saying, "Yes we support the development of Mackenzie Valley gas and we're going to ensure Northerners get full benefits from it," he said.
-- With files from Richard Gleeson.
