Two critical ingredients will come together within days — or weeks, at most — for the Canadian entry in the arctic natural gas pipeline race, the federal minister of indian affairs and northern development predicted Monday. Robert Nault said he expects a land claim agreement with the last holdout among the First Nations of the NorthWest Territories, the Deh Cho. He also described a deal for one-third native ownership of the Mackenzie Valley project as done except for final details.

At a gas convention held in Houston by Ziff Energy Group and in a telephone conference call with Canadian reporters, Nault declared “Canada is open for business. We are ready to deliver on opening up the north.” Aides said he also delivered the message in private meetings with ConocoPhillips, ExxonMobil, ChevronTexaco and Apache executives as forces in northern Canadian gas development.

Nault said the Deh Cho deal, an “interim agreement” to be ratified by the group’s communities, will end a 30-year marathon of negotiations with a blueprint for assuring them of benefits from northern gas. Arms of the Deh Cho already participate in projects in the southwestern corner of the Northwest Territories. But consent to large-scale development affecting the entire region has been withheld while negotiators worked on defining a territory and the native community’s economic rights and help for them in taking advantage of them.

Nault said native resistance against industrialization of the gas-rich Mackenzie Delta and the Mackenzie Valley pipeline route, a fixture of the northern Canadian scene since the 1960s, will shortly be down to just “the odd dissenting voice.”

All concerned promise the change will show in forthcoming announcements by the Aboriginal Pipeline Group and the Delta producer consortium of Imperial Oil, Shell Canada, ConocoPhillips and ExxonMobil. The group includes all the territorial First Nations. Nault said “they have for all intents and purposes arrived at an agreement.” The timing for closing and disclosing the deal remains unsettled because “obviously you have to do the paperwork.”

Nault said the deal has been done using market forces rather than public assistance, although the Canadian government remains open to helping the Aboriginal group eventually with financial steps such as loan guarantees. He said he expects the land-claim and pipeline deals will promptly start the clock running on the Mackenzie Valley pipeline project by enabling the sponsors to file a “preliminary information package” with regulators. The package has been ready since last fall. Nault predicted the approval process can be completed in 24 to 30 months, using a cooperation plan and a Pipeline Readiness Office established in the territorial capital of Yellowknife in February.

A third key ingredient for Canadian Arctic gas development, a “framework agreement” with the Northwest Territories government, will be done this summer or in the fall at the latest, Nault predicted. The outline will clarify federal, territorial and Aboriginal intentions for jurisdiction and items that remain to be negotiated such as revenue sharing.

Nault said the gas industry can count on keeping current, favorable royalty arrangements that recognize the high risks involved in arctic exploration, development and pipelines. He said both levels of government have agreed not to disrupt relationships with industry even if there continue to be contested aspects of “devolution” of power over northern natural resources to territorial from federal authorities.

In Houston, Nault said the Canadian government has permanently laid to rest its former penchant for intervening in gas drilling, development, exports and prices. “We are through with incentives that distort decision-making,” he promised. He repeated the Canadian opposition to subsidized floor prices proposed for Alaskan gas in the continuing debate over energy policy in the U.S. Congress. The subsidies pose disruptive potential to the entire continental market for natural gas, he said.

“In Canada, just as in America, today’s energy policy recognizes the ability of markets to make choices. That’s more than good policy. It’s also carved into our international trade agreements, including NAFTA (the North American Free Trade Agreement.” Nault said Canadian ministers want to work with their counterparts in the Bush Administration on clearing up confusion caused by the subsidy proposals and on keeping alive decades-old treaty arrangements for Alaskan gas to cross Canada en route to the lower 48 states.

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