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Search continues for pipeline stake buyer
KOGAS not vying for Shell Canada's Mackenzie Delta assets, adviser says Thandiwe Vela Northern News Services Published Saturday, July 23, 2011
The company has set a proposal deadline of August 31 for potential buyers of its assets in the Mackenzie Delta region, including Shell's participation interests in the long-delayed construction of a Mackenzie Valley gas pipeline. One company widely speculated to take Shell's Mackenzie Delta assets has been the Korean Gas Corporation, known as KOGAS which has already acquired other gas asset shares in the Mackenzie Delta. However, KOGAS Canada Ltd. (KCL) adviser Andrew Palmer is denying KCL is interested in buying into the $16-billion proposal to construct a 1,200-km natural gas pipeline to Alberta. "That discussion was promptly terminated in our office," Palmer said, adding no evaluation report recommending or not recommending the pursuit of Shell's assets has been prepared to send to KOGAS headquarters. "To my knowledge, there is no one actively looking at that today." Palmer said the 27-step procedure KOGAS follows when considering investments would stretch long beyond Shell's proposal deadline. KCL's $30-million deal with MGM Energy to acquire a 20 per cent share of its Umiak natural gas asset in the Mackenzie Delta took more than eight months to negotiate, Palmer added. The work plan for that asset is in the context of the Mackenzie Gas Pipeline and whether or not there will be a decision to construct. MGM has not expressed interest in buying into the Mackenzie Gas Project but president Henry Sykes told News/North he considers the pipeline "the single most important capital project in Canada today." Shell was one of five proponents of the Mackenzie Gas Project, with Imperial Oil Resources Ventures, ConocoPhillips Canada (North), ExxonMobil Canada, and the Aboriginal Pipeline Group, rounding out the consortium. ConocoPhillips spokesperson Rob Evans said despite Shell's decision to leave the Mackenzie Gas Project, the company remains committed to the project, "engaged in the process and is continuing to move forward." Evans declined to speculate on whether companies will pick up Shell's stake. Fred Carmichael, chair of the Aboriginal Pipeline Group, said he believes there will be no shortage of companies wanting to buy Shell's 11 per cent stake in the project. "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. The partners in the project are working to arrange a fiscal agreement with the federal government and have until the end of 2013 to decide whether they will proceed to construction.
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