Extension sought for Mackenzie Gas Project

The earliest possible construction start for the Mackenzie Gas Project, which would connect natural gas fields in the Canadian Arctic with northwestern Alberta, is 2022, according to a request by project sponsors for an extension in federal approval.

Canada’s National Energy Board approved the project in December 2010 and issued a certificate of public convenience and necessity for the 1,220-km Mackenzie Valley Pipeline the following March (OGJ Online, Mar. 11, 2011). Unless extended, approval expires at the end of this year if construction doesn’t begin.

“Due to the current challenging North American natural gas market conditions, a decision to construct the project has not yet been made,” lead sponsor Imperial Oil advised in letter to the NEB. The company asked the board to extend the sunset clause to Dec. 31, 2022, “to provide time to determine if the currently oversupplied North American natural gas market will recover sufficiently to warrant a resumption in the project work.”

If Imperial and its partners decided to proceed with the project, the letter said, they would need about 4 years for preconstruction work including fiscal framework discussions, detailed engineering, and “extensive” permitting.

“As a result,” the letter said, “2022 is expected to be the earliest possible construction start.”

The project is based on a 6-tcf gas resource in three Mackenzie Delta fields in Northwest Territories. In addition to the gas pipeline and field developments, work would include construction of a gathering system, gas processing plant, and 457-km natural gas liquids pipeline between Inuvik and Norman Wells.

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