Canada's National Energy Board has given initial environmental approval for export of as much as 9.2 tcf of natural gas from the Mackenzie Delta.
NEB gave the green light following environmental review of planned exports by Gulf Canada Resources Ltd., Imperial Oil Ltd., and Shell Canada Ltd., the companies that own the reserves. Most of the gas is earmarked for U.S. markets.
An export project would cost an estimated $11 billion in development and pipeline construction costs. Low gas prices and market surpluses are expected to delay development and marketing until the late 1990s.
NEB approved export applications for the project in 1989, then was asked by Ottawa to review its environmental aspects. NEB said effects on the environment will occur only at the time of construction and operation of facilities. It said a decision to issue licenses at this time does not mean gas will flow to market without further regulatory consideration of development in the area.
"On the contrary," NEB said, "all the facilities related to the development, production, and transmission of this gas will be subjected to thorough scrutiny by regulatory agencies, which will include an examination of the environmental and directly related social effects. "
Imperial has said it wants to export 5.1 tcf of gas during 20 years starting in 1996. Gulf wants to export 3.2 tcf in the same period, and Shell the balance of volumes approved for export.
Industry observers do not expect a demand for Canadian arctic gas until the late 1990s or early in the next century. John Beddome, president of Polar Delta project Ltd., said lead time required for the regulatory process and pipeline construction will be about 7-8 years. Polar Delta is a pipeline partnership of TransCanada PipeLines Ltd. and Tenneco Inc.
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