Only weeks away from planned filings of formal regulatory applications and after nearly four years of study and negotiation, the proposed C$5 billion, 1.2 Bcf/d. Mackenzie Valley Pipeline finally secured support from a majority of the aboriginal communities along the 760-mile route.

The Sahtu Dene, in the middle reaches of the route along the Mackenzie River, have stepped forward as the third native community to sign a formal commitment to be a shareholder in the Aboriginal Pipeline Group (APG).

Sahtu Dene Council Grand Chief Frank Andrew and APG chairman Fred Carmichael announced the agreement was signed at a private ceremony in the Canadian gas capital of Calgary on June 23. While the announcement was delayed for weeks, the signatures were inked in time to meet a June 30 deadline set by an APG’s agreement to take a one-third interest in the pipeline with industry sponsors Imperial Oil, Shell Canada, ConocoPhillips Canada and ExxonMobil Canada.

The deal specified the project had to have support by a majority of the four Mackenzie region aboriginal groups. The Sahtu Dene agreement raised the fully committed number to three. Formal shareholder agreements were signed earlier by the Inuvialuit on the Beaufort Sea coast and Mackenzie Delta and their neighbors to the immediate south, the Gwich’in.

In the southern half of the Northwest Territories, the Deh Cho have still not signed a shareholder agreement with APG or set a target date for closing a deal. But the Deh Cho have been intimately involved in the aboriginal investment alliance since its formation, and branches of the community have set up a variety of programs and contractor firms aimed at participating in eventual construction of the pipeline.

The Deh Cho are limiting their role in the pipeline group to observer status until they finish separate land claim negotiations. Carmichael has promised to hold open the door for a formal shareholder agreement for as long as the community needs to reach the larger settlement with the federal government.

Andre underlined the high significance that northern aboriginal communities put on the gas project. He emphasized that the shareholder signing ceremony was held to coincide with the anniversary of a comprehensive land claim settlement with the federal government by the Sahtu Dene and mixed-blood Metis who live among them.

The Sahtu alone expect to net up to C$300 million (US$225 million) from their share of pipeline tariffs, excluding native employment and business spin-offs which the project is pledged to maximize. Andrew also emphasized that community land access and benefits agreements will be made separately from the APG business arrangements, spawning additional community benefits.

The Mackenzie Gas Project would involve natural gas production facilities, compression and gathering pipelines in the Mackenzie Delta area, and a pipeline system in the Mackenzie River valley. The proposed pipeline would start at the outlet of a facility located near Inuvik and carry an initial 1 Bcf/d and up to 15,000 b/d of liquid byproducts south to connections with the established pipeline infrastructure in northwestern Alberta. The pipeline’s first phase will draw on the 6 Tcf of reserves found by frontier drilling since the 1960s in the Mackenzie Delta and the shallow waters of the Beaufort Sea.

Sponsors won a battle last week to limit the broad reviews sought by environmental groups that would have involved investigating gas use in oilsands production (see Daily GPI, June 21).

©Copyright 2004 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.