Terry Halifax
Northern News Services

Yellowknife (Nov 22/02) - Despite some negative comments from the federal government about a Mackenzie Valley pipeline, the producers' group is forging ahead.

Hart Searle, spokesman for the Mackenzie Gas Project (MGP), said the comments from Natural Resource Minister Herb Dhaliwal were regarded by the group as just one of the many twists and turns involved in a major undertaking.

"We're optimistic that this funding issue will be addressed and resolved quickly and we'll continue to move forward," Searle said. "On big projects like this, it's never smooth sailing. There's always dips and bumps along the way and you have to work with them."

Searle said work is progressing on a number of fronts including environmental fieldwork, and regulatory and community consultation.

"We're continuing to charge on ahead," Searle said.

The MGP held its open sessions over the summer to gauge producer requirements for a Mackenzie Valley pipeline. Searle said the results were pleasing to the group.

Impressed with results

"We are very impressed with the significant response we did receive, both in terms of the number of companies that expressed interest and the size and potential volumes," Searle said.

"We received responses from 20 companies," Searle said, adding that the total includes the four anchor producers, ConocoPhillips, Shell, Imperial, ExxonMobil. "They represent assets in both the Mackenzie Delta and or the Mackenzie Valley."

"We weren't sure what to expect," he said. "We know that there are other discovered resources in the Northwest Territories, such as in the Fort Liard area, Colville Lake and a number of other companies who have drilling and exploration work underway."

The expression of interest has provided the engineering group a basic understanding of the pipeline requirement and will allow the design to go into preliminary stages.

"The design of the proposed pipeline will handle an initial gas volume of 1.2 billion cubic feet per day," Searle said. "That would be expandable to 1.9 b.c.f per day, by adding compression facilities."

The initial design will be used as a project description for the regulatory application that the groups expects to file late in 2003.

The project team has met with each of the potential shippers, to better understand the stage of development and have also started monthly meetings to discuss current and future capacity requirements.

"A final decision on pipeline capacity can only be made on the basis of firm shipping commitments," Searle said. "We don't have that yet. This was a non-binding expression of interest."

He said that design engineering is also working on technical design sensitivities in case projected volumes don't materialize or more resources are discovered, increasing the capacity.

"You're dealing with the best data that you have, but you have to carry some flexibility," he said. "We wanted to make sure that our process was flexible enough to recognize and accommodate those kinds of dynamics."

The date for a completed design is a "moving target" and will be filed along with the application to the National Energy Board.

The MGP will file the application, hearings will be held and, assuming there is a favourable decision made in the hearings, the approval to start construction.

Searle estimates that will come around late 2004 or early 2005.