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Shell Canada CEO Says Group Still Committed to Mackenzie Pipe

Shell Canada Ltd.'s CEO said earlier this month that the company remains committed to the proposed Mackenzie Valley natural gas pipeline, but Shell and the other companies involved in moving the proposal forward still need clear guidelines from the federal government.

Clive Mather told the Calgary Chamber of Commerce at a luncheon that the Mackenzie pipeline "is a very, very important project, and we are committed to doing it. But what we want to see is some unblocking of the regulatory processes so we can actually get this thing started again."

Shell Canada joined with Imperial Oil, ConocoPhillps, ExxonMobil and the Aboriginal Pipeline Group to develop gas fields and lay a gas-gathering network in the Mackenzie Delta. However, the consortium halted its pre-planning development earlier this year because it said that the project was costing millions, with no negotiations completed between private and regulatory stakeholders. Among other things, the energy companies said they were hampered by land-claim issues by native groups that would be affected by the pipeline.

"We've had to stop the pre-work because simply we couldn't afford to carry on burning money at the rate we were," Mather said. However, he added that since the consortium announced it would delay the project, "Ottawa has put additional resources on the case and they are working with us to try and move this thing forward."

This summer, Mather said he would be talking with some of the stakeholders in the project to see if the outstanding issues could be resolved. He declined to say if there was a timetable on whether the consortium would again move the project forward.

"I tend not to get stuck on specific windows," Mather said. "I think we have to accept that this is urgent, and so the sooner we get going the better. We don't have a drop dead date. It is an important project but the economics would be enhanced if we could get started earlier than later." He added, "I hope that by the time we get through to fall, we could see change."

Currently, Mather said, "there are many claims being made by First Nations through the length of the pipeline. We believe those fall legitimately to governments rather than to the economics of the project because if we overload the project the result is certain -- it won't stand up economically and then it won't get done."

The pipeline also would cut through 62 miles of Dene Tha' lands, and that native group also has filed a lawsuit to prevent the project from moving forward. The Dene Tha' said it has been ignored in the project's design and early regulatory process. The Dene Tha' lawsuit seeks a judicial stay of hearings by the joint review panel.

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