Foothills Pipe Lines Ltd. has recruited an early ally for itseffort to revive the dormant Alaska Natural Gas TransportationSystem — the government of Canada’s Yukon Territory.

In Whitehorse, the Yukon capital, Economic Development MinisterTrevor Harding announced a pipeline unit has been added to hisdepartment and is taking the initiative in starting discussions onreviving ANGTS. The decision made it plain that the Yukon sideswith Foothills in emerging competition to advance an arctic gastransportation megaproject. The step followed two weeks of meetingsbetween Yukon representatives and Foothills executives.

Harding said “our goal is to secure the Alaska Highway route.”Foothills and its owners, TransCanada PipeLines Ltd. and WestcoastEnergy Inc., continue to support the original ANGTS along the roadthrough the Yukon. Also in contention to deliver northern gas isa newer group called Arctic Resources (Alaska). Backed byHouston-based Municipal Energy Resources Corp., Arctic proposes aY-shaped alternative to ANGTS with an underwater connection betweenthe Mackenzie Delta and Prudhoe Bay then a route south via theMackenzie Valley. The rival to ANGTS is understood to be generatingconsiderable support in the Northwest Territories, although itsleaders have yet to take sides as plainly as the Yukon government.

The rivalry has been set off by growing belief in forecaststhat the “lower-48” United States market will expand to 30 trillioncubic feet per year, generating strong prices for a decade or more.The projections have also set off an exploration revival in theNorthwest Territories by a long lineup of producers ranging fromChevron Canada Resources to Alberta Energy Co., as well as a studyrevisiting the economics of tapping about 13 Tcf of reserves heldin the Mackenzie Delta-Beaufort Sea region by Shell Canada, GulfCanada and Imperial Oil. The exploration revival has begun goingbeyond acquisitions of drilling leases into field activity, withSchlumberger seismic-survey crews now being dispatched into arcticterrain.

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