Thorunn Howatt
Northern News Services

Yellowknife (May 03/01) - A major discovery in the Mackenzie Delta means gas for the Aboriginal Pipeline Group's portion of a proposed Mackenzie Valley line.

"We certainly see a possibility of nominating the gas from the Tuk field into the aboriginal pipeline," said Petro-Canada spokesperson Chris Dawson.

Devon Energy Corp. and partner Petro-Canada struck the gas.

They tested their Tuk M-18 well at 30 million cubic feet a day, with recoverable reserves estimated at 200 billion to 300 billion cubic feet.

Right now there is no way to get gas out of the Mackenzie Delta because there are no pipelines.

The Mackenzie Valley Aboriginal Pipeline Corp. (MVAPC) is working on a deal giving the aboriginals of the NWT one-third ownership of a proposed pipe that would carry Canadian arctic gas southward following the Mackenzie Valley. It is partnered with a consortium called the Mackenzie Delta Producers' Group that holds major reserves in the Delta. The deal doesn't secure gas for the aboriginals' portion of the line though. Devon and Petro-Canada don't belong to the producers' consortium. And the MVAPC wants to sell capacity of close to 500 million cubic feet per day to producers outside the Delta consortium to fill its one-third portion of the pipe.

So the Devon Petro-Canada find could mean a customer for the MVAPC if their pipeline is ever built. Now the MVAPC just has to come up with its billion-dollar share needed to build the pipeline.

The new well's up to 80 million cubic feet per day is still short of the 500 million needed by the aboriginal group, so energy explorers are continuing the search. Drilling commitments in the Delta total about $650 million.

Thousands of kilometres of seismic activity went on in the Mackenzie Delta last winter. Chevron Canada Resources, BP Canada Energy Co., along with Burlington Resources Canada Energy Ltd., could drill for gas next freeze-up.

The Devon Petro-Canada Tuk M-18 well is about 25 kilometres south of Tuktoyaktuk and drilled to a depth of 3,000 metres. It is owned 50-50 by each company with Devon acting as the operator. The partners are now thinking about next winter's drilling and exploration on their million acres of Mackenzie Delta leases. Together they are the largest leaseholders in the industry.

Oklahoma City-based Devon took over the arctic exploration properties when it bought Calgary-based Anderson Exploration Ltd. for $6.7 billion last autumn.

The Devon Petro-Canada find was good news after three other wells drilled with partners in the same region did not fare as well. Tuk B-02, Kugpik L-46 and Kurk M-15 were all unsuccessful.