February 2008 Edition

B.C. First Nation says it won’t benefit from natural gas project

TransCanada wins bid to build natural gas pipeline out of Alaska

B.C. First Nation says it won’t benefit from natural gas project

The chief of the Kelly Lake Cree Nation says his band is being stepped on in the race by oil and gas companies to tap into northern British Columbia’s resource riches.

Chief Cliff Calliou is worried the band won’t see a dime from BP Canada’s $1.2-billion Noel natural gas project, which received internal company approval recently to proceed in the initial planning process.

“We don’t live on a reserve, but we live on a territory, and anything that’s happening on that territory we strongly feel that we should be compensated somehow, some way, either through economic development opportunity or direct employment,” Calliou said.

BP did consult with the First Nation in the initial phases of preparations.

But the band, which claims 400 members, doesn’t have title to the area. Its $5.2-billion land claim has been bogged down since 1994.

While the claim works its way toward a settlement, any royalties derived from area resources continue to go into government coffers.

Calliou also doubts that the band will benefit directly, although it operates a development company suited for construction work.

The tight-gas project, located about 10 kilometres west of Kelly Lake, is so named because it will tap into underground gas-bearing rock formations. BP estimates the Noel field contains around 462 billion cubic feet of gas, with a 30-year production life. Over 10 years, the company expects to drill about 132 wells and pipe the gas to an existing processing plant that hasn't been secured yet. BP also plans to power the well sites using solar and other forms of renewable energy.

With the first stage of internal approvals completed and the community at large made aware of the plans, company spokesperson Jessica Whiteside said the real planning work now begins ahead of a final decision in June.

BP intends to spend $20 million preparing construction schedules, doing engineering work, securing equipment and requesting bids from contractors.

But the project isn't a slam-dunk. BP still needs regulatory approvals, although the company is optimistic.

“A lot of that is trying to see if the conceptual plans around cost and things like that, the engineering work, if they actually match up to reality once you start getting bids from contractors and ordering some of your equipment,” Whiteside explained.

If work goes ahead as planned, the firm expects total capital expenditures over the life of the project to top $1.2 billion, she said.

Chief Calliou said he would like to hammer out a mutually beneficial arrangement with the company.

“We still have to sit down with the people at BP and try and figure out a better working relationship and try and see how much opportunity is out there for the community,” he said.

Calliou claims water quality in the lake itself has already been adversely affected.

Calliou said he’s seeking legal advice with regard to protests, which could include handing out notices to contractors working in the area indicating they're trespassing on First Nations land.

TransCanada wins bid to build natural gas pipeline out of Alaska

By Jeannette Lee

Calgary-based TransCanada Corp. (TSX:TRP) has beat out four competitors in a bid to build a natural gas pipeline out of Alaska that would supply energy to millions of consumers throughout North America, state officials announced January 4th.

The company's subsidiary, TransCanada Alaska Company, LLC/Foothills Pipelines, Ltd. is the only one to meet a long list of business terms set forth by the state, which is moving aggressively to bring its natural gas to market as energy prices continue to rise.

“We have long stated that it only takes one good application. We're thrilled to have a project sponsor willing to build a pipeline on terms that benefit all Alaskans,'' Gov. Sarah Palin said in a news conference at her downtown office.

TransCanada is proposing to root the gas line in Arctic oil fields on Alaska's North Slope, the bedrock for the state's robust oil industry since the 1970s. From there, natural gas would flow 1,715 miles southeast to a pipeline hub in Calgary, that connects to all the major markets on the continent.

“TransCanada, of course, is pleased with today's announcement and we are looking forward to working with the state for successful conclusion to the process,'' said TransCanada spokeswoman Cecily Dobson.

About 35 trillion cubic feet of proved natural gas reserves are believed to lie beneath the North Slope permafrost, and energy analysts believe that figure will rise in the future.

At a projected cost of $26 billion, the proposal could become the largest, most expensive energy facility ever constructed, or simply the largest private-sector project ever undertaken, in North America.

TransCanada owns one of the largest natural gas pipeline networks in the world, tallying 58,700 kilometres of pipe that ferries nearly 30 billion cubic feet of gas each day. The company has long had an interest constructing an Alaska gas line.

A North Slope gas line has been discussed since oil first moved down the 1,300-kilometre trans-Alaska oil pipeline in 1977. But the prospects only gained momentum in the last few years with natural gas futures trading in the mid-$7 range.

The U.S. consumed about 21.7 trillion cubic feet of natural gas in 2006, according to the Energy Department.

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	OIL & GAS February 2008 index B.C. First Nation says it won’t benefit from natural gas project TransCanada wins bid to build natural gas pipeline out of Alaska B.C. First Nation says it won’t benefit from natural gas project The chief of the Kelly Lake Cree Nation says his band is being stepped on in the race by oil and gas companies to tap into northern British Columbia’s resource riches. Chief Cliff Calliou is worried the band won’t see a dime from BP Canada’s $1.2-billion Noel natural gas project, which received internal company approval recently to proceed in the initial planning process. “We don’t live on a reserve, but we live on a territory, and anything that’s happening on that territory we strongly feel that we should be compensated somehow, some way, either through economic development opportunity or direct employment,” Calliou said. BP did consult with the First Nation in the initial phases of preparations. But the band, which claims 400 members, doesn’t have title to the area. Its $5.2-billion land claim has been bogged down since 1994. While the claim works its way toward a settlement, any royalties derived from area resources continue to go into government coffers. Calliou also doubts that the band will benefit directly, although it operates a development company suited for construction work. The tight-gas project, located about 10 kilometres west of Kelly Lake, is so named because it will tap into underground gas-bearing rock formations. BP estimates the Noel field contains around 462 billion cubic feet of gas, with a 30-year production life. Over 10 years, the company expects to drill about 132 wells and pipe the gas to an existing processing plant that hasn't been secured yet. BP also plans to power the well sites using solar and other forms of renewable energy. With the first stage of internal approvals completed and the community at large made aware of the plans, company spokesperson Jessica Whiteside said the real planning work now begins ahead of a final decision in June. BP intends to spend $20 million preparing construction schedules, doing engineering work, securing equipment and requesting bids from contractors. But the project isn't a slam-dunk. BP still needs regulatory approvals, although the company is optimistic. “A lot of that is trying to see if the conceptual plans around cost and things like that, the engineering work, if they actually match up to reality once you start getting bids from contractors and ordering some of your equipment,” Whiteside explained. If work goes ahead as planned, the firm expects total capital expenditures over the life of the project to top $1.2 billion, she said. Chief Calliou said he would like to hammer out a mutually beneficial arrangement with the company. “We still have to sit down with the people at BP and try and figure out a better working relationship and try and see how much opportunity is out there for the community,” he said. Calliou claims water quality in the lake itself has already been adversely affected. Calliou said he’s seeking legal advice with regard to protests, which could include handing out notices to contractors working in the area indicating they're trespassing on First Nations land. back to top TransCanada wins bid to build natural gas pipeline out of Alaska By Jeannette Lee Calgary-based TransCanada Corp. (TSX:TRP) has beat out four competitors in a bid to build a natural gas pipeline out of Alaska that would supply energy to millions of consumers throughout North America, state officials announced January 4th. The company's subsidiary, TransCanada Alaska Company, LLC/Foothills Pipelines, Ltd. is the only one to meet a long list of business terms set forth by the state, which is moving aggressively to bring its natural gas to market as energy prices continue to rise. “We have long stated that it only takes one good application. We're thrilled to have a project sponsor willing to build a pipeline on terms that benefit all Alaskans,'' Gov. Sarah Palin said in a news conference at her downtown office. TransCanada is proposing to root the gas line in Arctic oil fields on Alaska's North Slope, the bedrock for the state's robust oil industry since the 1970s. From there, natural gas would flow 1,715 miles southeast to a pipeline hub in Calgary, that connects to all the major markets on the continent. “TransCanada, of course, is pleased with today's announcement and we are looking forward to working with the state for successful conclusion to the process,'' said TransCanada spokeswoman Cecily Dobson. About 35 trillion cubic feet of proved natural gas reserves are believed to lie beneath the North Slope permafrost, and energy analysts believe that figure will rise in the future. At a projected cost of $26 billion, the proposal could become the largest, most expensive energy facility ever constructed, or simply the largest private-sector project ever undertaken, in North America. TransCanada owns one of the largest natural gas pipeline networks in the world, tallying 58,700 kilometres of pipe that ferries nearly 30 billion cubic feet of gas each day. The company has long had an interest constructing an Alaska gas line. A North Slope gas line has been discussed since oil first moved down the 1,300-kilometre trans-Alaska oil pipeline in 1977. But the prospects only gained momentum in the last few years with natural gas futures trading in the mid-$7 range. The U.S. consumed about 21.7 trillion cubic feet of natural gas in 2006, according to the Energy Department. back to top