Canada's NWT borrowing boost may help unlock stranded oil and gas

Tue Apr 21, 2015 7:03pm EDT
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By Nia Williams

CALGARY, Alberta (Reuters) - Canada's Northwest Territories will be able to borrow an extra C$500 million to fund new infrastructure projects and potentially tap stranded oil and gas reserves after the federal government upped its borrowing cap in the budget on Tuesday.

The new borrowing limit of C$1.3 billion is less than the C$1.8 billion requested by the NWT but still a huge boost to the vast but sparsely populated territory, home to nearly 25 percent of Canada's natural gas reserves.

The NWT mainland, Arctic islands and Beaufort Sea hold 16.4 trillion cubic feet gas, as well as 1.2 billion barrels of crude oil, according to the National Energy Board.

But the majority of resources are not accessible by road, rail or pipeline, making oil and gas development prohibitively expensive.

The NWT now plans to improve infrastructure in a region twice the size of France and a population of just 43,600.

"We are pleased. We have not made any specific decisions yet but our priority is to invest in infrastructure that will support economic growth in the NWT," said Shaun Dean, director of Cabinet communications for the territorial government.

"That includes facilitating greater access to all the territory's resources and supporting responsible development."

Better infrastructure will also cut the cost of living in remote communities, which pay hefty prices for food and fuel to be flown in.   Continued...