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NEB Issues Conditions to Speed Mackenzie Pipeline Review Process

In hopes of expediting the regulatory review process, Canada's National Energy Board (NEB) Monday issued proposed conditions that could be attached to any approvals it may issue for the Mackenzie Gas Project.

The project, which is weighed down by C$7.5 billion (US$6.4 billion) in costs that continue to rise, could be shelved. Contested regulatory reviews are entering their second year with no quick end in sight.

The NEB normally releases for comment all proposed conditions for a project approval simultaneously. But for the Mackenzie Project, not all potential conditions will be known until after the parallel joint review panel hearing and report are completed. In the meantime, the NEB is releasing some proposed safety and design conditions under its NEB Act and Canada Oil and Gas Operations Act (COGOA) authority.

The conditions are grouped around phases of the project: preconstruction, construction and operation. One proposed condition, for example, is a requirement for an emergency response plan to address worker, public and environmental safety in the remote northern operations environment.

The conditions for the pipeline and the gathering system, as well as conditions for the three natural gas fields, can be viewed in full on the NEB website at www.neb.gc.ca.

The NEB instructed all hearing participants to provide written comments by noon MST March 30. The agency also noted that it may periodically issue further proposed conditions for comment before the end of the hearing process. The board completed the planned evidentiary phase of its Mackenzie Project hearings in December and will provide direction on the process for final argument at a later date.

In August, project senior partner Imperial Oil told the NEB that completion of the project could be postponed for a year until 2012. Despite another delay, natural gas supplies are growing on the "near frontier" of northeastern British Columbia, which is already connected to North American markets (see Daily GPI, Aug. 4, 2006). Partnering with Imperial in the project are Shell Canada Ltd., ConocoPhillips, Exxon Mobil Corp. and the Aboriginal Pipeline Group. Last month a new entrant to the northern pipeline fray was distributing a circular to investors that detailed its plans. In a 135-page document, MGM Energy Corp. outlined its proposal (see Daily GPI, Jan. 29).

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