Canadian Arctic Pipeline Plans Move Ahead

Plans are progressing for a natural gas pipeline from Canada's Arctic while a competing proposal from Alaska remains mired in uncertainty. The Mackenzie Valley Producers Group, led by Imperial Oil Ltd. said it awarded a contract for conceptual and preliminary engineering to a joint venture called COLTKBR. The venture includes Colt Engineering Corp. and Kellogg Brown & Root. The producers group has started preparing regulatory applications for a line to northwestern Alberta from the Mackenzie Delta region of the Northwest Territories that would ship about 1 billion cubic feet of gas a day. The cost has been estimated to be approximately $2 billion for the project, which could be completed by 2007 or 2008 at the earliest. Imperial's partners are Shell Canada Ltd., Conoco Inc. and Exxon Mobil Corp.

The project would include gas production and gathering facilities in the Mackenzie Delta, where the producers hold reserves, and a pipeline to Norman Wells, N.W.T., where liquid hydrocarbons would be removed from the gas. The line would extend south, connecting with Alberta's extensive pipeline network. Northern Canadian native groups, represented by the Mackenzie Valley Aboriginal Pipeline Corp., would own a third of the line.