Imperial Oil Ltd. and cosponsors of the proposed C$7 billion Mackenzie Delta pipeline have halted their work because of what they said was a lack of progress to move the development forward. The announcement is considered a major setback for development of the Mackenzie project, which would bring new supplies of gas from the Canadian Arctic to southern Canada and the Lower 48.
Cosponsors of the project include ExxonMobil Corp., ConocoPhillips, Shell Canada Ltd. and the Aboriginal Pipeline Group. They filed their regulatory applications for the project last fall, but Canadian regulators have pushed forward the deadlines and there has been little progress.
Instead of working on regulatory issues, Imperial, which indicated the project would eventually go forward, will focus on regulatory issues. It also said it wanted to see substantial progress before public regulatory hearings begin, which are expected later this summer.
“Despite significant effort and expenditures by the proponents and other parties, the reality is that adequate progress is not being made in key areas,” said Michael Yeager, senior vice-president of Imperial Oil. “Our efforts to resolve issues in these areas have not diminished. However, to achieve real progress, approaches need to change. We are refocusing our efforts to address these essential issues. We are not giving up on developing a project that can be a sound investment for the proponents and can contribute to sustained economic development for the people of Canada’s north, including employment, business opportunities and growth.”
Henry Sykes, president of ConocoPhillips Canada, said his company believes the project “offers significant opportunities to Canada, and particularly Northern Canadians, as well as a competitive source of gas supply for North American markets. However, resolution of these outstanding issues in a timely manner is essential for the project to proceed.”
Ian Kilgour, Shell Canada’s senior vice-president of exploration and production, said the decision to halt operational work on the gas pipeline “was extremely difficult, but it was necessary. The coventurers have serious concerns regarding the pace of progress relative to our ongoing investments, and the lack of convergence in some key project areas. We remain hopeful we can get back on track.”
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