The Government of the Northwest Territories remains confident in the potential of the proposed $16.2 billion Mackenzie Gas Project, despite last week’s news that the proponents have pushed the project’s startup date until 2018 at the earliest.
Doug Doan, the assistant deputy minister of Industry, Tourism and Investment, said while Imperial’s March 15 letter to the National Energy Board might seem disappointing at first glance, there is more to the story.
“The actual update … is basically demonstrating the reconfirmation of market demand to the year 2030,” he said. “The schedule might be a little disappointing to some folks but the filing in itself is a really good thing because it really is demonstrating that the project is still economically feasible, and the market demand is there. I think that’s a very positive thing.”
An Imperial Oil spokesperson said the company remains confident the project will be a “vital and needed” source of natural gas for the foreseeable future.
“There will be a place for Mackenzie Gas in that equation,” Imperial’s Pius Rolheiser said Monday. “The market will need and support the project.”
In its letter, Imperial provided an updated economic feasibility, and stated the proponents would make a decision on whether to proceed with the project in late 2013, four years later that when they filed their application in 2004. Gas would begin flowing through the 1,200-kilometre pipeline by 2018 at the earliest.
Rolheiser said the uncertainty of the regulatory process were to blame for the delay. Imperial halted engineering and execution planning work in 2006. To make a final decision on construction would require the resumption of that work as well as obtaining the “hundreds, if not thousands” of permits required to begin construction, Rolheiser explained.
“The length of time that the regulatory process is taking is the single major factor here,” he said.
Doan said that the GNWT, the NEB and numerous other organizations knew that the last schedule filed by the proponents in 2007 was now invalid.
“The fact of the matter is the four-year delay is really overstating the facts because I think if anything the delay might be more in the order of one week from what our expectations were – our practical expectations,” he said.
Next month’s National Energy Board final hearings will provide another important step in the process, Doan explained. The hearings are scheduled from April 12-17 in Yellowknife and April 20-24 in Inuvik.
“The schedule that was filed in 2007 and the schedule that was filed the other day – they’re still just projected schedules,” he said. “The discussion is going to happen at (the) National Energy Board. When that hearing is over we will have a very clear idea of time-frames.”
The project was discussed heavily at last week’s Dehcho Business Conference on the Hay River Reserve. Randy Ottenbreit, the Mackenzie Gas Project development executive for Imperial Oil gave an update on the project on March 16.
The latest filing, which was required after the NEB ruled on a request from social justice group Alternatives North on Feb. 22, shows the project is still economically viable, Doan said.
“It’s not something to call doom and gloom about,” he said. “The market demand is there. We’re good to go.”