An agreement on aboriginal cooperation has been made as the opening move towards building a new natural gas pipeline across northern Alberta to the oilsands region. Dene Tha’ Chief Stephen Didzena confirmed his community reached an understanding with TransCanada PipeLines Ltd. on building a relationship that will be essential for the project to go ahead.

The new plan, still in preliminary stages, calls for a link to Fort McMurray from the southern end of the proposed C$5 billion (US$3.8-billion) Mackenzie Valley Pipeline. The 760-mile Arctic leg of the northern project would end near the Alberta-British Columbia border about 150 miles west of Fort McMurray.

The deal with the Dene Tha’ is a “protocol agreement” that enables TransCanada to build, operate and maintain pipeline facilities on traditional aboriginal land in northwestern Alberta. “We’ve established a strong foundation for the future,” said TransCanada communications officer Heidi Feick.

TransCanada’s project, known as the north-central crossover, is still in discussion stages with no firm estimates of capacity, costs or lengths of pipe established yet, Feick said. She described the proposal as “part of our long-term strategy.”

TransCanada forecasts gas consumption by oilsands plants for heat processes and power generation will triple by 2015 to 1.8 Bcf/d. The anticipated oilsands demand will be greater than the entire 1.5 Bcf/d expected from the Mackenzie pipeline.

The proposed crossover pipeline would close a gap in the Alberta gas grid, which has long arms reaching up both the east and west sides of the province but no connection between them.

The crossover is part of a wider strategy that also includes plans for accommodating gas from Alaska as well as Canada’s Northwest Territories. TransCanada and the dominant partner in the five-year-old Alliance Pipeline, 50% owner Enbridge Inc., are devising ways for Canadian pipelines to handle Alaskan volumes that would replace earlier, tentative plans by Prudhoe Bay producers for a new express or bullet line across western Canada and the U.S. Midwest. The Canadians believe they can come up with low-cost ways to look after 5.5 Bcf/d of northern gas, including 4 Bcf from Alaska as well as 1.5 Bcf from the Mackenzie Delta.

Current thinking at TransCanada, disclosed recently by gas development vice-president Steve Clark, foresees a combination of building the north-central crossover, putting excess capacity in its own eastbound mainline back to work, and adding traffic to the Alliance, Pacific Gas and Foothills systems.

In addition to improving TransCanada’s ability to make plans, the agreement with the Dene Tha’ highlighted an aspect of aboriginal relations which is little understood outside northern regions. Aboriginal communities are not necessarily natural allies of southern environmentalists in resisting industry expansion into new areas on principle. The aboriginal interest is in livelihoods as well as preservation.

“We’ve never tried to stop development,” Didzena said in an interview. “I even pride myself that my community is just as pro-development as the private sector is.”

His Dene Tha’ have industry experience. Community economic activities include a 50% partnership with Lakota Drilling Ltd. in two drilling rigs working in northern Alberta and BC for EnCana Corp. The agreement, celebrated with a feast in the Dene Tha’ capital of Chateh in northwestern Alberta, followed talks that turned friendly after an initial spat before the National Energy Board.

“I don’t like to mix business with politics,” Didzena said. “The problem is not in the development itself, but in how to come to grips with the law.”

The wrangle before the NEB centered on how Alberta’s Dene Tha’ will be consulted and have opportunities in the Mackenzie Gas Project by Imperial Oil, ConocoPhillips Canada, Shell Canada, ExxonMobil, the Northwest Territories Aboriginal Pipeline Group and TransCanada.

Didzena said he accepted assurances by the NEB that government authorities will work with aboriginal communities in ways that comply with legal requirements still evolving in cases before the courts.

The Dene Tha’ are still unsure about Imperial’s intentions as the senior corporate partner in the Mackenzie project towards full cooperation with the northern Alberta aboriginal community, the chief added.

When asked whether he would like to put together an Alberta counterpart to the Aboriginal Pipeline Group’s one-third ownership of the Mackenzie project, Didzena said “I wish I could — if I had the money.”

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