Imperial Oil Ltd., which is leading the Mackenzie Gas Project (MGP) consortium, took another baby step forward last week after agreeing to a benefits package with Northwest Territories (NWT) provincial authorities. The Socio-Economic Agreement outlines guarantees for aboriginal residents who would be living along the proposed natural gas pipeline’s 750-mile (1,200-kilometer) route.

The MPG was formed to develop an estimated 6 Tcf in the three largest onshore fields discovered in the Mackenzie Delta and construct the associated pipelines and facilities. The project includes three anchor field developments, gas and gas liquids gathering system pipelines and related facilities, as well as the Mackenzie Valley gas pipeline. The pipe would have an initial design capacity of 1.2 Bcf/d, and be expandable to accommodate gas from other fields in the future.

“This agreement is a significant step forward in the project’s progress,” said Imperial Senior Vice President Randy Broiles, who spoke for the consortium. “It defines the key areas of agreement and commitment between the project proponents and the government of the Northwest Territories, and establishes a foundation for moving forward together. More importantly, this agreement outlines our shared belief that the Mackenzie project has the potential to provide significant benefits to all stakeholders, in particular the people and communities of the North.”

The benefits package is considered one of the keys to the project gaining final approval, but the pipeline’s consortium still faces more hurdles before construction begins — if ever (see NGI, Jan. 8; Dec. 18, 2006). Imperial’s consortium partners are ConocoPhillips, Shell Canada Ltd., ExxonMobil Corp. and the Aboriginal Pipeline Group (APG). The APG was formed in 2000 to represent the ownership interest of the aboriginal peoples of the NWT.

The package includes commitments for access to gas supplies from the pipeline, as well as business opportunities for communities in the Mackenzie Valley. The agreement outlines commitments by the consortium for specific areas that include employment requirements and policies, hiring and procurement priorities for NWT and aboriginal people, oil and gas training, transportation and infrastructure impacts, cultural preservation, safety and security, and a monitoring advisory board (society) for the life of the project.

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