Canadian Arctic gas partner willing to talk LNG

Thu May 3, 2012 1:49pm EDT
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By Jeffrey Jones

CALGARY, Alberta (Reuters) - The native-owned corporation that would control a third of a long-delayed gas pipeline in Canada's Far North is open to discussing the idea of a liquefied natural gas project that would allow reserves to be shipped to Asia to kickstart development, its president said on Thursday

Bob Reid, president of Aboriginal Pipeline Group, said the company is not locked into a particular route and is "absolutely" willing to talk about changing plans to include an LNG option, an idea that appears to be building momentum as North American gas prices languish near 10-year lows.

"We're not constrained to routing at all, but at the moment there's not a plan to, let's say, go from the Mackenzie Delta westward," Reid said.

The APG was formed to take an ownership stake in the pipeline portion of the C$16.2 billion ($16.4 billion) Mackenzie Gas Project in the Northwest Territories. It has focused on 1,196 km (743 mile) line that would ship 1.2 billion cubic feet of gas a day along the Mackenzie River Valley to Alberta for sale within North America.

First envisioned in the 1970s, the pipeline received regulatory approval last year, but stalled amid depressed gas markets and the lack of a financial support deal with Ottawa.

The Sahtu, Gwich'in and Inuvialuit people of the Mackenzie Valley, who are the APG shareholders, would still have to get similar benefits as a condition for supporting any change from the approved project to focus on exports, Reid said.

This week, Northwest Territories Industry Minister David Ramsay said the territorial government could support a shift to an LNG project if it could kickstart development of vast Mackenzie Delta gas reserves, seen as a catalyst to economic growth in the sparsely populated region.

One possible option could be a pipeline that would take Canadian gas to an as-yet unbuilt transport system in Alaska for shipment to a terminal proposed for Valdez on the West Coast.   Continued...