Inuvik Gas ditches deal
Community exploring options to replace heating fuel distribution system by 2018
Stewart Burnett
Northern News Services
Monday, January 9, 2017
INUVIK
The Town of Inuvik is on the hunt for a new home heating fuel supplier after Inuvik Gas announced it was cancelling its agreement with the community two years into a 10-year deal.
Inuvik Gas is pulling the plug on its 10-year contract to supply the community with natural and synthetic natural gas after only two years. - NNSL file photo |
Inuvik Gas renewed a 10-year agreement in 2014, giving the company exclusive rights to distribute natural gas and synthetic natural gas to the community. The company's announcement means its service will come to an end in December 2018.
"Inuvik Gas Ltd. has decided to exercise its option under the franchise agreement to terminate the agreement effective December 2018," stated Kate Darling, Inuvik Gas director, in an e-mail.
"Over the next two years, IGL will continue the safe and reliable operation of the existing gas distribution system and is committed to working with the town in order to ensure an effective transition."
Inuvik Gas, incorporated in 1997, is owned by a three-member consortium consisting of Inuvialuit Petroleum Corporation; ATCO Midstream NWT Ltd., a subsidiary of ATCO Energy Solutions Ltd; and Atlas Gas Utility Holdings Inc., a subsidiary of Atlas Gas Utility Group Inc. According to its website, Inuvik Gas has 900 customers in Inuvik and nine full-time employees.
Inuvik Gas did not provide a reason for its decision to cancel its contract. Its relationship with the town grew rocky before the current contract was signed after customers complained of rising heating costs.
The company switched to mostly synthetic natural gas - a mixture of propane and air that must be trucked in from down south - after discovering its Ikhill natural gas well was nearly depleted in 2011. Home heating bills more than doubled the following year.
The Town of Inuvik attempted to purchase Inuvik Gas in 2013 after both sides announced their intentions not to renew the distribution contract.
After months of discussion, they both agreed to a new contract the following year. Grant Hood, senior administrative officer for the town, said termination of the agreement will open opportunities to other suppliers.
The infrastructure in the ground belongs to Inuvik Gas, he said, so another company could put in new piping, enter into an agreement with Inuvik Gas or purchase the company.
"It opens up some options," said Hood.
"The town's exploring all our options as to what the impact is going to be."
He said it's clear Inuvik Gas wants to leave and the two years' notice was stipulated in the franchise agreement.
Assessing what the best move forward is for the town will be a top priority this year, he said.
