Canada's Northwest Territories open to LNG option

Tue May 1, 2012 8:58pm EDT
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By Jeffrey Jones

CALGARY, Alberta (Reuters) - The government of Canada's Northwest Territories, hit by persistent delays in development of a C$16.2 billion ($16.5 billion) natural gas pipeline, could support a liquefied natural gas alternative for vast reserves in the region's Mackenzie Delta, one of its ministers said on Tuesday.

A month after proponents of the Mackenzie Valley gas pipeline said they had chopped spending on the project, David Ramsay, the territories' minister of industry, tourism and development, said LNG has to be looked at as an option.

"I think as a territory we have to keep all our options open - that's the most important thing. We have the resource. How do we get it out? How do we get it to market? All of those options have to be analyzed," Ramsay said in an interview after a press conference at an offshore technology conference in Houston.

"We just need to move forward. We can't just sit back and wait for things to happen. We have to make things happen."

Holders of gas reserves in Canada's Far North have discussed a pipeline to southern markets since the 1970s, and Imperial Oil Ltd has led efforts over the past decade to move the project forward with support from aboriginal groups who seek economic development in their communities.

The Mackenzie pipeline project won regulatory approval in 2011 following a seven-year review, but Imperial and its partners have not given a corporate green light to it as North American gas prices languish near 10-year lows and talks aimed at getting financial support from Ottawa have not borne fruit.

One partner, Royal Dutch Shell put is stake on the block last year but has yet to announce a buyer.

Major oil companies seeking to develop even larger reserves on North Slope of Alaska have devoted efforts to moving supplies to a proposed gas liquids plant in Valdez to be shipped to Asia, where prices are richer. Previously, most resources went to attracting interest in a $40 billion pipeline to Canadian and U.S. markets.   Continued...