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Partners reduce funding for Mackenzie Gas Project Aboriginal Pipeline Group chair insists efforts being made to keep project afloatThandiwe Vela Northern News Services Published Monday, April 9, 2012
"With our partners, we have made a business decision to delay the restart of the project due to the continuing low price of natural gas (below $2)," stated Aboriginal Pipeline Group chair Fred Carmichael in a news release announcing plans to downsize the group's operations. "We intend to explore all available options to make this pipeline happen and intend to continually seek opportunities to push the restart button - as early as possible." The Aboriginal Pipeline Group holds a 33 per cent stake in the $16.2-billion, 1,200 km pipeline, with Shell, Imperial Oil Resources Ventures, ConocoPhillips Canada, and ExxonMobil Canada rounding out the project proponents. All the partners have decided to reduce spending "in line with anticipated project activity," said Jon Harding, Imperial Oil spokesman. The reduction in Mackenzie Gas Project spending will include the closure of offices in Fort Simpson and Norman Wells, and a reduction in the size of the office in Inuvik. "It's unfortunate that it comes out as looking like some of the partners are backing off from the project," said O.D. Hansen, of the Aboriginal Pipeline Group, adding, that's "not the case." NWT Premier Bob McLeod said the partners in the project are still committed, and the project may be delayed, but it is going ahead. Market signals indicate the price of natural gas will go up by 2020, the time the pipeline is expected to be in operation, McLeod said. A report published on the Aboriginal Pipeline Group's website cites the abundance of shale gas, found in rocks, as having dramatically lowered the price of natural gas over the past several years. Some analysts have stated in the past that $6 per thousand cubic feet of gas would be needed to make the pipeline project viable.
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