Yellowknife (Oct 11/04) - The cost of a Mackenzie Valley natural gas pipeline has risen to $7 billion under plans unveiled last Thursday when project partners filed a series of regulatory applications.

The long-awaited blueprint describing how the pipeline will be built was filed Oct. 7 with various agencies responsible for assessing and regulating energy development in the NWT.

The plan calls for two pipelines to be built, one from Inuvik to Alberta to carry natural gas and a shorter one to carry natural gas liquids from Inuvik to Norman Wells.

"Our original concept was one single pipeline and we changed that to two; one with gas and one with liquids," said Mackenzie Gas Project spokesperson Hart Searle.

Shipping charges, camp costs as well as river and creek crossings are all contributing to the rising costs for the overall project -- up from previous estimates of about $4 billion.

The project is being proposed by Imperial Oil, ConocoPhillips Canada, Shell Canada, ExxonMobil Canada and the Aboriginal Pipeline Group (APG).

The Environmental Impact Statement (EIS) has been submitted to the Joint Review Panel appointed by the Mackenzie Valley Environmental Impact Review Board. All other applications have been submitted to the National Energy Board, according to Searle.

Altogether, the submissions are thousands of pages long, he confirmed, and the joint review panel will now take approximately four months to review them.

"The EIS addresses the environmental and socio-economic matters associated with the project and is designed and assesses potential impacts for the project," said Searle.

The Joint Review Panel's assessment process is expected to take close to two years, Searle added.

The proposed Mackenzie Gas Project consists of the natural gas pipeline running from Inuvik to the Alberta Border, a gas separating facility to be located just outside Inuvik, compressor stations and a shorter natural gas liquids pipeline that will connect to the existing Enbridge oil pipeline at Norman Wells.

Applications for permits to develop project infrastructure, from construction camps to access roads, quarries and pipeline rights-of-way are expected to be filed in 2005.

While the application doesn't guarantee the pipeline will be built, Premier Joe

Handley said the NWT has to ensure it maximizes benefits from the megaproject.

The pipeline "won't come at the expense of our children's future," Handley vowed.

"The big challenge is negotiating a resource-sharing agreement between ourselves and the federal government and the aboriginal governments.

"On the present formula we will only collect four cents out of each dollar of government revenue, the federal government will take the rest."

Aboriginal Pipeline Group (APG) president Bob Reid agreed with Handley.

"We are also supporters of a revenue-sharing arrangement between the government of the Northwest Territories and the federal government. What we don't agree with is using the pipeline as a lever and securing future benefits."

Reid also maintains while the overall costs for the Mackenzie gas Project have gone up, the costs for the Aboriginal Pipeline Group have remained the same. The Aboriginal Pipeline Group owns one-third of the natural gas line running from Inuvik to the Alberta border.

Lawsuits pending

The Dehcho First Nations angered pipeline partners in recent weeks with filing of two lawsuits against the joint review panel.

One seeks to force the government to give them two seats on the panel and the second is seeking an injunction to stop the panel from holding hearings.

Handley said he hopes to arrange a meeting between the Deh Cho and the federal government.

"It's very difficult for anyone to support their actions, not because of the merit of the court case but because what they're doing is jeopardizing opportunities for others," he said.

"What they are looking for is to have their own regulatory and environmental assessment process. They don't want to be part of the Mackenzie Valley regime."

During a recent meeting in Inuvik, First Nations leaders from the Deh Cho, Mackenzie Delta and Sahtu unsuccessfully tried to resolve the issue.

"The three settled land claims expressed their opinions that the legal actions by the Deh Cho represent a threat to the Mackenzie Gas Project and deliberately undermine the rights of the claimant groups and future economic well-being in all three regions," said a press release issued by Gwich'in, Inuvialuit and Sahtu leaders Oct. 1.

Deh Cho leaders were not available for comment at press time.

proposals:

Apart from work being done on the gas fields near Inuvik, the Mackenzie Delta Producers are also proposing the following.

- A 1,220 km, 30-inch underground gas pipeline from the Inuvik-area facility, south along the east side of the Mackenzie River via Norman Wells to connect to TransCanada's Alberta system in northwestern Alberta for delivery to market.

- A buried, 10-inch natural gas liquids pipeline of about 475 km, from the Inuvik-area facility to Norman Wells to be built along the same right of way as the Mackenzie Valley Pipeline.

- Four compressor stations to allow the Mackenzie Valley Pipeline to deliver 1.2 billion cubic feet per day of natural gas.

- A gas separation facility to be located 20 km east of Inuvik to pump, compress and cool natural gas and natural gas liquids.

* Field developments will include facilities in the Mackenzie Delta at the Taglu field, owned 100 per cent by Imperial Oil. The development also includes the Parsons Lake field, owned 75 per cent by ConocoPhillips Canada, and 25 per cent by ExxonMobile Canada. A third field -- Niglintgak -- owned 100 per cent by Shell Canada will also be developed.