Prentice says Mackenzie pipeline will advance Canada’s interests
THE CANADIAN PRESS // 23/05/08
CALGARY — The Mackenzie pipeline — long beset by regulatory snags and cost overruns — will “undoubtedly advance” Canada’s national interests once it is built, but control over the project must remain in private-sector hands, said Industry Minister Jim Prentice.
“The (Mackenzie Gas Project) would be one of the largest projects undertaken since the building of the railroads in this country and I want to underscore that the government of Canada supports this project,” Prentice told a Canadian Energy Pipeline Association dinner in Calgary Thursday.
“It is in the interest of all Canadians that this project advance.”
The 1,200-kilometre pipeline would carry natural gas from the Mackenzie Delta in the Northwest Territories into the energy-hungry North American marketplace.
The latest official estimate from March 2007 puts the cost of the project at $16.2 billion — more than double its previous pricetag of $7.5 billion. And industry observers say the cost is more like $20 billion now.
The latest delay came last week, when an independent review panel into the pipeline’s environmental and social effects said it would take another year to hand down its report because of the sheer volume of work involved.
Prentice says Ottawa is doing everything it can to make sure the panel has adequate resources and that the government will be ready to do what it needs to once the panel’s work wraps up.
But “any other course of action I think would not be constructive at this point,” Prentice said.
The minister also stressed that Ottawa would not consider owning the pipeline and that it would have to remain a “private-sector driven project.”
Mackenzie is currently controlled by a consortium led by Imperial Oil Ltd. (TSX:IMO) and also includes Royal Dutch Shell PLC, ConocoPhillips, Exxon Mobil Corp. and the Aboriginal Pipeline Group.
But there’s word Calgary-based pipeline company TransCanada Corp. (TSX:TRP) and the APG will take the lead in order to move it forward more quickly, although no official announcement has been made to that effect.
“I called upon the proponents a year ago to reinvent the project, to employ a Canadian ingenuity so that the project could work for both the proponents and for Canada,” Prentice said.
“While I cannot say that the job is yet completed, I can say that the past year has brought about considerable ingenuity, genuine discussions and progress towards reinvention and getting the project to work.”
Another mega-project is being planned for Alaska, which would dwarf Mackenzie in cost and size.
On Thursday, the state’s governor said she would recommend legislators give the go-ahead to TransCanada’s $26-billion proposal instead of another one by BP and ConocoPhillips.
The legislators have 60 days to review the licence proposal. A special session begins June 3 in Juneau.
TransCanada’s pipeline would carry 4.5 billion cubic feet of natural gas per day through its 1.2-metre diameter, 2,760-kilometre pipeline from Prudhoe Bay on Alaska’s North Slope to Alberta’s hub.
Prentice said both projects are important, but it’s key the Mackenzie project go ahead of the Alaska one.
“The North American economy, frankly, would have challenges in terms of the pipeline industry and the steel industry in their capacity to build these two projects at the same time. They are massive, massive projects,” he told reporters.
“The issue has been that if the Mackenzie project does not proceed first there is the possibility of what’s called stranded gas, or stranded assets in the north because of the sheer size of the Alaska project.”