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Mackenzie Valley Pipeline Moves Forward

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The Hedley Project

A major hurtle for the advancement of the proposed Mackenzie Valley pipeline was cleared with the signing of a milestone agreement on June 19 between the Inuvik-based Aboriginal Pipeline Group, and TransCanada Corp., giving the aboriginal groups of the Northwest Territories one-third ownership of the $3.5 billion Artic pipeline project.

Under the terms of the long-awaited agreement, Trans Canada Corp. will lend the pipeline group $80 million for preliminary work in the project definition phase. APG can use the money to pay for its share of a feasibility study or to support project financing of its share of construction costs.

The loan guarantees the APG status as a fully-fledged partner in the joint venture to extract six trillion cubic feet of natural gas from three northern fields.

In return for financing APG, TransCanada will receive a five per cent interest in the venture. That interest will come from the four members of the Producer's Group: Imperial Oil, Shell Canada, Exxon Mobile Canada Ltd. and Conoco Phillips Canada.

TransCanada, the largest pipeline company in Canada, will have the right to raise its stake by buying up to half of whatever portion may be placed for sale by the Producer's Group.

In addition, the pipeline company has agreed to pursue its extension of its Alberta pipeline system to connect with a Mackenzie Valley pipeline just south of the Alberta-Northwest Territories border.

More than 2,000 jobs
The Mackenzie Valley pipeline will run 1,300 kilometres from the NWT to northeastern Alberta. During the peak of construction, an estimated 2,600 jobs will be created. Offices have been opened in the NWT, to provide local residents with information on potential job opportunities with an emphasis on proper training for northern aboriginals to work on the massive energy project.

Members of the APG include groups from the Gwichin, Inuvialuit, Deh Cho, Sahtu, Akaitcho, Dogrib, Salt River, and the north and south Slave Metis Alliances.

APG chairman Fred Carmichael said that economic self-sufficiency is more realistic for northern aboriginals.

"It's a bright future for the Northwest Territories. It's a great future for our children," said Carmichael.

The $80 million is also intended to enable the APG to go to bankers and other lenders to raise enough money to pay for their share of a "base level" pipeline.

The project still faces numerous boards and review panels with jurisdiction in the north before any construction begins and the energy producers must also vote on final approval.
If approved by regulators, the Mackenzie Valley pipeline project will be the largest energy venture in Canada since the mid-nineties.

Attention will now focus on revenue-sharing and land claims with aboriginal groups and the government of the Northwest Territories.