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CALGARY, ALTA
Shell Canada is planning to sell its share in the Mackenzie Gas Project - the long-delayed proposal to develop natural gas fields in the Mackenzie Delta and construct a 1,200-km-long pipeline to Alberta.

The company plans to divest its assets in the Mackenzie Delta region, said Stephen Doolan, a spokesperson for the company in Calgary.

In essence, Shell Canada - part of the multinational company Royal Dutch Shell - has decided to focus on other opportunities elsewhere to create the greatest value for shareholders.

"Shell still believes that the project is important for Canada, but Shell is continually evaluating our portfolio and looking at our assets, and active management of our assets is something that's not new to us," Doolan explained, adding the Mackenzie Delta assets didn't fit into the company's plan.

Shell Canada is one of four oil and gas companies involved in the $16-billion Mackenzie Gas Project. The others are Imperial Oil Resources Ventures, ConocoPhillips Canada (North), and ExxonMobil Canada. The consortium also includes the Aboriginal Pipeline Group, which represents the aboriginal peoples of the NWT.

Shell Canada owns the Niglintgak natural gas field - on the southern end of Niglintgak Island, 120 km northwest of Inuvik and 85 km west of Tuktoyaktuk - and was to construct and operate the production facilities there.

The company's intention to leave the project became known in a divestiture brochure that it recently provided to potential buyers. A virtual data room will also be opened to prospective buyers on July 18.

Doolan said Shell Canada continues to believe in the viability of the project.

Bob McLeod, the GNWT's minister of Industry, Tourism and Investment, said he recently heard about Shell Canada's plans.

"I think that it's part of the normal business that oil companies go through. They review the direction they're going on a regular basis," he said, adding the company decided it had priorities elsewhere.

McLeod doesn't think Shell Canada's decision reflects on the viability of the project and he remains confident it will go ahead.

"I think there are a lot of other companies that would be interested in taking on this share, especially since the Mackenzie pipeline project has completed its regulatory review," the minister noted. McLeod rejected the idea that Shell's withdrawal from the project will create negative optics that might discourage other firms from becoming involved.

"I think that Shell has about an 11 per cent share in the project," he said. "I guess I'd rather look at it as they see it as a good opportunity to get some money."

Fred Carmichael, chair of the Aboriginal Pipeline Group, also doesn't see Shell Canada's decision as a problem, although he noted the company has been a good partner.

"I'm sure there'd be a lot of people that would love to step up and take Shell's position," he said.

Carmichael said it will be easy for other companies to buy the 11 per cent stake.

"I'm sure they'd like to get their foot in the door because they see the Arctic as the last frontier, and this is where they're going to be getting the oil and gas, especially gas, for the foreseeable future," he said. "So they're going to need our resources, and companies are smart enough to look to the future and say this will be a good investment."

Carmichael predicted some other company will be "pretty quick" to replace Shell Canada.

In fact, he hopes some other aboriginal partners will become involved in the project's ownership.

The partners in the project have until the end of 2013 to decide whether they will proceed to construction.

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