Imperial requests extension until 2022
Company cites glut in natural gas market and falling prices as reason
Karen K. Ho
Northern News Services
Monday, August 31, 2015
NORTHWEST TERRITORIES
Imperial Oil, the company behind the proposed Mackenzie Gas project in the territory, has applied to the National Energy Board for an extension until Dec. 31, 2022.
Boats towing streamers which record seismic data during Imperial Oil Ltd.'s 2008 seismic acquisition on the Ajurak block, in the Beaufort Sea. The company's work in the territory has slowed significantly due to falling oil and natural gas prices, but it says that it wants to continue pursuing the Mackenzie Gas Pipeline through a certificate extension into 2022 with the National Energy Board. - photo courtesy of Imperial Oil |
The company cited a "current challenging North American natural gas market" as the reason for the application.
Originally, the certificate was set to expire on Dec. 31 if construction of the Mackenzie Gas Project had not started by the end of 2015.
However, a letter submitted to the National Energy Board by Imperial senior vice-president Bart Cahir on Aug. 20, states that a construction start date had not yet been determined before the end of this year and the company wants the extension of the additional seven years to "determine if the currently oversupplied North American natural gas market will recover sufficiently to warrant a resumption in the project work."
In Cahir's letter to the National Energy Board, Imperial also cited the decline of natural gas prices by approximately half since the company first filed its application in 2004.
Cahir stated that Mackenzie Gas Pipeline proponents would need about four years for pre-construction activities, such as engineering and the permit process.
The Inuvialuit Regional Corporation, Gwich'in Tribal Council, Imperial Oil, Tulita Land/Financial Corporation and NWT Premier Bob McLeod all sent letters in support of the extension.
In his letter, Tulita Land/Financial Corporation president Clarence Campbell stated the pipeline would bring significant economic benefits to his region.
"We feel the North is better off with the (Mackenzie Gas Pipeline) than without it," he stated.
In a letter addressed to Cahir and shared with the National Energy Board, Inuvialuit Regional Corporation chair and chief executive officer Nellie Cournoyea described the project as "precedent-setting."
She emphasized that the formation of the Aboriginal Pipeline Group is an "exceptional achievement."
The Aboriginal Pipeline Group is a business formed when 30 indigenous leaders from all regions of the NWT signed a resolution in 2000 to represent the interest of their people. The group since achieved the right to own one-third of the natural gas pipeline.
"It is the first in Canada - and perhaps globally - where aboriginal people have significant ownership and meaningful participation in a venture of this kind," she stated.
In her letter, Cournoyea also cited negotiated access and benefits agreements as well as an established $500-million Mackenzie Gas Project Impact Fund that would be lost if an extension was not granted.
