Wednesday, February 06, 2008

MacKenzie Gas Project

To quote directly from the MGP website"The Mackenzie Gas Project is a proposed 1220-kilometre natural gas pipeline system along the Mackenzie Valley of Canada's Northwest Territories to connect northern onshore gas fields with North American markets."

The proposal has the pipeline going through about 200km to the east of where I am currently living in the North West Territories. We had a group come to our school yesterday to discuss with the students what the project is and how the local communities could be helped by it.

From my notes, and without verifying the data, the MGP is the biggest development project in Canada's history, estimated to cost $16 billion dollars. The investing corporations are Exxon Mobile, which I understand made a whopping $40 billion in profits last year, the most money any corporation has ever made in history, Imperial Oil/Esso, Shell, Conoco Philips and the Aboriginal Pipeline Group, which includes the Inuvialuit, Gwichin, and Sohtu.

The project was originally estimated to cost $7.5 billion, but has since increased to the $16 billion and it is not expected to be transporting gas until 2014. From what I understand, the project is still being looked at for environmental impacts through the Joint Review Panel.

The stuff I have looked up... The pipeline should hook up to 3 natural gas fields that should be able to supply 800 million cubic feet per day over the life of the fields, which hold an estimated 5.8 trillion feet, which gives about a 20 year life to the projects from just these three fields. This is enough gas to heat all homes in Canada for about six years.

From what I know about gas is that the price when way up, around $12 and there ended up being an over supply and it sunk to about $6. There were hedges made at $8 and $9 that have probably only finished for this fiscal year but gas has come close the $8 level. Take of the currency losses and it is down 40-50% off its high.

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