Although no gas is flowing from the Sable Offshore EnergyProject to markets in Maritimes Canada and New England, theMaritimes & Northeast Pipeline crossed a significant politicalhurdle yesterday that smoothes the way for eventual service. Itsigned an agreement with the Assembly of the Nova Scotia Mi’kmaqChiefs covering a wide variety of environmental and socio-economicmatters. Financial details of the agreement were not released, butthe Indians had been demanding about $98 million, according todocuments filed with the National Energy Board. Pipeline officialsdid say they have agreed to contribute funds for a number ofpipeline monitoring and educational activities. They also haveagreed to give the Indians 5% of the project work done in theprovince.

The agreement is expected to satisfy an item in NEB regulationscalled Condition 22, which requires a project that crosses Indianterritory to develop a program of impact studies and environmentalmonitoring with the Indians, in this case Nova Scotia’s Mi’kmaqnatives. This fall, Canada’s Federal Court of Appeal directed theNEB to rehear a portion of its M&NP approval in order to ensurecompliance with Condition 22. Maritimes negotiations with theMi’kmaq had broken off prior to the signing of an agreement, butthe board went ahead and approved the project anyway.

The pipeline already has received all the necessary regulatoryapprovals, but the disagreement with the Indians caused a delay inthe process and some significant embarrassment for sponsors andregulators. It also might have been a political sticking point hadit not been resolved prior to initial service. The Mi’kmaq pulledno punches in warning that Atlantic gas development could be heldhostage if the wider political demands were not granted.

“This agreement ensures Nova Scotia Mi’kmaq benefit from thepipeline project both environmentally and economically by becomingfull participants,” said Membertou Chief Terrance Paul, Co-chair ofthe Assembly of Nova Scotia Mi’kmaq Chiefs.

Despite the last remaining political hurdle, Maritimes is stillwaiting for Sable Island producers to begin delivering 450 MMcf/dof gas to the mainline. They now believe it will arrive before theend of the year.

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