The future of the Mackenzie Valley project remains uncertain after Shell Canada announced Friday its intention to exit the proposed multi-billion dollar natural gas venture, Alberta's Energy Minister, Ron Liepert, said Monday.
"At gas prices of $4/MMBtu, we doubt if it will move ahead," he told reporters at Springbank airport, 60 km west of Calgary. "The existing partners are now re-assessing their next move and will be on the look out to fill in Shell's gap. But any decision on whether they finally go ahead will depend on the market."
His statements came ahead of a two-day meeting of Canadian provincial energy and mines ministers, due to start Monday in Kananaskis, Alberta.
The meeting will be chaired by the federal Natural Resources Minister, Joe Oliver. In response to a query about whether delays in the regulatory process led Shell to exit the proposed gas venture, Oliver said: "It was a private sector decision and we do not know what motivated them."
"We admit there have been regulatory delays and are working to make the process more efficient. Our understanding is that Shell decided to walk away as it did not fit into their global investment plans," he added.
In March, Canada's National Energy Board granted regulatory approval for the estimated C$11.3 billion ($11.8 billion) project, nearly seven years after an application was filed.
But on Friday, Oliver told the Calgary Chamber of Commerce the federal government intended to streamline the regulatory process for large projects. "Far too much ... time is being taken and it is also proving to be [a] very costly process for project applications to receive approval," he said.
The Mackenzie pipeline is intended to bring Canadian Arctic gas south to Alberta and then onto the US. The pipeline would run 1,196 km (740 miles) and have a capacity of 1.2 Bcf/d.
Shell has a 11.4% stake in the Mackenzie Valley project, according to the Aboriginal Pipeline Group, which has 33.3% stake. Imperial Oil holds a 34.4% stake, ConocoPhillips holds 15.7% and ExxonMobil holds 5.2%. Imperial is 60% owned by ExxonMobil.
Imperial said Friday it was committed to the project.
