The apparent success of the Alliance Pipeline Project islighting a fire under government and industry plans to build upnatural gas production behind its starting point, in northeasternBritish Columbia, into a mainstay of supplies for markets east ofthe Rocky Mountains.

B.C. Premier Glen Clark declared intentions to enact a packageof reforms to make his province fully competitive with Alberta as ahome to the gas industry. His administration promptly approved thefirst in an anticipated string of new developments, and the sponsormade an immediate start on construction.

Clark told an annual meeting of the Canadian Association ofPetroleum Producers to declare that his left-leaning New DemocraticParty government is “going to cut royalties and taxes.” Clark didnot specify numbers for the reductions but he assured they willbring B.C. into line with Alberta, which keeps about 20% of salesrevenues but uses a flexible system that cuts the take in the lowsof market cycles. Other items on the B.C. agenda are topped by apledge to speed up a notoriously slow drilling and project approvalprocess. He also committed B.C. to a program of financial aid toindustrial towns in the northeastern gas region, so they can build”infrastructure” required by drilling and development operations.

Clark repeated the B.C. government’s vigorous support forAlliance, saying its proposed export route to Chicago spells anopportunity for the province to live up to its potential. One-thirdor more of Alliance’s 1.3 Bcf/d initial capacity is forecast tocome from B.C. and the province has potential to double itsproduction to more than two Tcf annually within 10 years, accordingto a recent report by the KPMG accounting and financial house.

Clark’s government immediately underlined its intentions towardsthe gas industry by approving a C$97-million (US$71-million), 160MMcf/d processing and gathering project in the West Stoddart areaof northeastern B.C., northwest of the regional industrial capitalof Fort St. John. The project by Novagas is expected to be inoperation by late this summer.

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