Source: Reuters
Senior Exxon VP Andrew Swiger says that the company is still "advancing" the Mackenzie Valley Gasline project, despite the National Post's report earlier in the week that the Canadian federal government had decided not to provide financial support for the project.
Seeing as the NP's report has not been corroborated anywhere as of yet, this would seem a smart move.
Worth remembering a few potential implications here: Exxon/Mobil (through their Canadian subsidiary Imperial Oil) would have to essentially write off billions of dollars of development work that they have put into the Mackenzie Delta over the past four decades. And that's just the start.
The majors would lose a new "lane" from the Beaufort. They'd also lose potential supply from gasfields in the western Arctic. And then there's that nasty little matter of the debt incurred by the current members of the Aboriginal Pipeline Group; I could easily see the Canadian federal government being on the hook for that.
Assuming the Alaska Highway Gas Pipeline goes ahead (and I'm optimistic that it will), the Mackenzie line is only viable under the scenario that it gets finished first, and that gas gets to ship over it for three to five years before Alaska gas comes onstream.
There's other implications, too. If we gain some certainty about these pipeline projects, major energy customers in Canada and the lower 48 US can start making plans to use cheap gas, helping to build the market. This won't happen until projects are finally green-lit and underway.
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