Canada

Prospects for construction of Canada’s Mackenzie Valley pipeline continue to recede as the federal government lays out conditions for supporting the pioneer arctic natural gas development with favorable financial terms.

The Conservative government of Canada’s energy province is promising to inaugurate a new era of efficient regulation — by going back to the approach taken in its formative times. After 12 years of a forced marriage, Alberta’s natural gas, oil and power watchdogs will regain their former stature as two separate agencies responsible for supply development and protecting consumers.

Prospects for construction of Canada’s Mackenzie Valley pipeline continue to recede as the federal government lays out conditions for supporting the pioneer arctic natural gas development with favorable financial terms.

Two of Canada’s largest energy trusts, Calgary-based PrimeWest Energy Trust and Shiningbank Energy Income Fund, agreed last week to merge in an all-stock deal valued at C$1.25 billion. The combined trust will create a natural gas-heavy producer with an undeveloped land base of more than 1.1 million net acres primarily focused in west central Alberta, northeastern British Columbia and the Williston Basin in the United States.

Two of Canada’s largest energy trusts, Calgary-based PrimeWest Energy Trust and Shiningbank Energy Income Fund, agreed to merge in an all-stock deal valued at C$1.25 billion that will create a natural gas-heavy producer with an undeveloped land base of more than 1.1 million net acres primarily focused in west central Alberta, northeastern British Columbia and the Williston Basin in the United States.

EnCana Corp.’s Deep Panuke offshore natural gas plan moved forward Tuesday after an independent commissioner appointed by the Canada-Nova Scotia Offshore Petroleum Board (CNSOPB) recommended tentative approval. A final decision on whether to allow EnCana to ramp up its dormant development of the offshore Nova Scotian field is expected this summer.

Nymex Holdings Inc., the parent company of the New York Mercantile Exchange Inc. (Nymex), on Friday closed on the previously announced purchase of a 10% equity stake in the Montreal Exchange Inc. (MX), Canada’s financial derivatives exchange. As part of the deal, Nymex and MX also announced the creation of the Canadian Resources Exchange Inc. (Carex), their new joint business venture dedicated to the Canadian energy marketplace.

Alliance Pipeline Ltd. filed an application with Canada’s National Energy Board to construct compression and ancillary facilities at its existing Taylor Junction valve site, approximately 6 kilometers (3.7 miles) northeast of Taylor, BC, within the Peace River Regional District. The proposed expansion would enhance capacity for gas receipts originating in northeastern BC. Construction of the facilities would enable an increase in gas receipt capacity on Alliance’s BC lateral system. Alliance will not increase the mainline capacity of its system with this project, only the ability for existing shippers to increase gas nominations at receipt points in BC. The additional capacity was made available to existing Alliance shippers through a binding open season in October, and Alliance has entered into contracts with the interested shippers. Subject to regulatory approval, site foundations will be poured in Fall 2007 and the major construction activities would occur during 2008. Start-up is scheduled for November 2008.

Alliance Pipeline Ltd. filed an application with Canada’s National Energy Board to construct compression and ancillary facilities at its existing Taylor Junction valve site, approximately 6 kilometers (3.7 miles) northeast of Taylor, BC, within the Peace River Regional District. The proposed expansion would enhance capacity for gas receipts originating in northeastern BC. Construction of the facilities would enable an increase in gas receipt capacity on Alliance’s BC lateral system. Alliance will not increase the mainline capacity of its system with this project, only the ability for existing shippers to increase gas nominations at receipt points in BC. The additional capacity was made available to existing Alliance shippers through a binding open season in October (see Daily GPI, Oct. 6, 2006), and Alliance has entered into contracts with the interested shippers. Subject to regulatory approval, site foundations will be poured in Fall 2007 and the major construction activities would occur during 2008. Start-up is scheduled for November 2008.