Financial Post: Optimism surrounding Mackenzie Gas Project grows

Jon Harding , Financial Post
Published: Thursday, September 13, 2007

One of Canada’s largest logistics companies catering to northern development projects added its name to a growing list of optimists who believe the $16-billion Mackenzie Gas Project will proceed.

“As others have said here this week, we believe it’s not a question of ‘if’ but rather ‘when’,” said Bob German, CFO of Horizon North Logistics Inc., a publicly traded Calgary firm.

Horizon, which runs a division that operates barges to move heavy equipment and personnel along the remote Mackenzie River in the Northwest Territories – the path of the proposed 1,400-kilometre natural gas link between the Mackenzie Delta and Alberta – believes talks are progressing on a restructuring of the project, perhaps along ownership lines, and that the project has become a key plank in Ottawa’s strategy to reinforce Canada’s ownership of parts of the Arctic.

“We talk to a number of people and hear different things, and I think Arctic sovereignty is on the agenda big time,” Mr. German said yesterday in an interview outside the Peters & Co. North American Oil & Gas Conference in Toronto.

“This [project] therefore plays into the notion of being in the national interest. It’s important to be the country that builds the infrastructure to the North.”

He also said Horizon hopes project backers Imperial Oil Ltd., Royal Dutch Shell Plc, Conoco Phillips, Exxon Mobil Corp. and the Aboriginal Pipeline Group (APG) will ultimately re-define their roles and turn construction and operation of the pipeline over to a true pipeline company, such as TransCanada Corp., which has financially backed the APG, an aboriginal group that owns one-third of the pipeline.

“I think TransCanada Corp. is very well-positioned to take the role in that and I think it’s moving in that direction,” Mr. German said.

Last week, Exxon Mobil CEO Rex Tillerson sparked renewed optimism when he said the pipeline is still very actively being worked on by the company.

Mr. German’s optimism about the pipeline echoed commsents this week from another Mackenzie Delta driller, MGM Energy Corp.

MGM’s chief operating officer, Gary Bunio, said on Wednesday the company hopes the Imperial Oil-led consortium behind the massive project will find a way to reshape it so that it meets federal government approval.

“If you are going to be an explorationist in Northern Canada, you must be an optimist,” Mr. Bunio said. “We hope the proponents will come to some resolution. Because if the pipeline doesn’t go ahead, we will have to go and find another way to get our gas to market.”

© Financial Post 2007

http://www.canada.com/nationalpost/financialpost/story.html?id=8a71ba46-d001-4e27-b2e8-21cc192950a5&k=47352

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