Taking the next logical step for the transportation of Canadian arctic natural gas, the Mackenzie Delta Producers Group, which consists of some of the heavy hitters within the oil and gas industry, said last Thursday that it has awarded the conceptual and preliminary engineering contract for the Mackenzie Gas Project to COLTKBR, a long-term joint venture of Colt Engineering Corp. and Kellogg Brown & Root, a subsidiary of Halliburton. The move brings the project a step closer to fruition and a step ahead of the competition in Alaska.

The Mackenzie Gas Project will involve natural gas production facilities, compression and gathering pipelines in the Mackenzie Delta area, and a pipeline to the Norman Wells area where a liquids recovery and compression facility will be installed. In addition, a pipeline with compression facilities will then proceed south from Norman Wells through the Mackenzie Valley into northwestern Alberta.

A Mackenzie Valley line is projected to cost C$4 billion (US$2.6 billion), or as little as one-fifth of the enormous pricetags being described for an Alaskan counterpart that would include an “express” route across the continent as well as the longer northern stretch needed to reach Prudhoe Bay, either along the Alaska Highway or beneath the Beaufort Sea to the Delta.

The group said that COLTKBR’s engineering work will assist in optimizing the commercial viability of the Mackenzie Gas Project and support the development of regulatory applications. Imperial Oil Ltd. is the operator of the gas gathering and pipeline systems for the project.

“Awarding this contract marks another significant step towards the preparation and filing of regulatory applications for the Mackenzie Gas Project,” said K.C. Williams, senior vice president and director of Imperial, speaking on behalf of the producers group and Mackenzie Valley Aboriginal Pipeline Corp. (MVAPC). “As the producers group and the MVAPC continue to move forward, we will ensure the project remains focused on safety, care for the natural environment and technical quality, as well as the owners’ shared objectives for aboriginal and northern involvement.”

COLTKBR said that engineering services will be executed in Imperial’s and Colt’s offices in Calgary, with the participation of specialists from the Mackenzie Gas Project owners.

In addition to Imperial, partners in the producers group include: Conoco Canada Limited; Shell Canada Limited and ExxonMobil Canada. The group and the MVAPC announced their intent earlier this year to begin preparation of regulatory applications needed to develop onshore natural gas resources in the Mackenzie Delta, including a Mackenzie Valley pipeline (see NGI, Jan. 14).

©Copyright 2002 Intelligence Press Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of Intelligence Press, Inc.