Although there still have been no formal announcements from any companies to proceed, support for a Mackenzie River Valley pipeline in the Northwest Territories is slowly growing, with aboriginal interests — considered key to any plan — steadily moving toward approval. One of the last communities uncommitted, the Acho Dene Koe, has joined a memorandum of understanding (MOU) to back the C$3 billion pipe.

The MOU was drafted in June by the Mackenzie Valley Aboriginal Pipeline Corp., which represents the First Nations in the Mackenzie Valley, and the Mackenzie Delta Producers Group, which includes Imperial Oil, Exxon Mobil Canada, Shell Canada and Conoco Canada (see Daily GPI, June 8). Once the MOU is approved, an agreement would be drawn up to outline mutually acceptable terms under which a pipeline could proceed.

Under the proposed MOU, the aboriginal peoples, represented by the Mackenzie Valley Aboriginal Pipeline Corp., would have one-third target participation and ownership in the pipeline. That ownership would be equivalent to a right to initial capacity of 400-500 MMcf/d, under the agreement. The proposed pipeline would start at the outlet of a facility located near Inuvik and extend to pipeline infrastructure in northwestern Alberta, including intermediate compressor stations. Initial shipping needs of 800-1,000 MMcf/d are expected from existing discoveries in the delta, totaling an estimated 5.8 Tcf.

While some aboriginal leaders readily agreed to terms, the 10 communities under the Deh Cho First Nations initially refused to sign the MOU until several issues were resolved, including outstanding land claims, benefits, access fees and royalties. Some of those issues will be negotiated with the Canadian government, according to the producers group. Some of the Deh Cho also want full aboriginal ownership, as proposed by Houston-based Arctic Resources (see Daily GPI, July 2).

In July, aboriginal leaders representing the Sahtu landowners and the Alberta First Nations agreed to endorse Arctic Resources project, the project, including its approach to providing pipeline management by aboriginal and Native American groups involved in the governance of the project (see Daily GPI, June 14, 2000). The Deh Cho are now considering the proposal, and in July, ARC officials said they remained optimistic about gaining the Deh Cho’s support. Together, the Sahtu and Deh Cho lands represent about 70% of the land in the Northwest Territories.

However, gaining the support of the Acho Dene Koe of the lower Northwest Territories is considered a major victory for the producers group, which so far has remained uncommitted in a timeline to move a pipe forward. The Acho Dene Koe have been involved in exploration and production of the Fort Liard gas play since 1994 where production has reached about 200 MMcf/d.

©Copyright 2001 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.