Skip to main content

The sun rises over the Mackenzie Delta near Inuvik, Northwest Territories November 11, 2009. Along Inuvik's icy Navy Road, fleets of idle trucks and clusters of unused oil field equipment are waiting for one of the world's biggest unbuilt energy projects - the Mackenzie natural gas pipeline - to get under way.

STAFF/REUTERS

A consortium of some of the world's largest oil companies has formally closed the book on a decades-long dream of tapping massive natural gas reserves in Canada's Far North.

Imperial Oil Ltd. said the companies, which also included Exxon Mobil Corp., ConocoPhillips Co. and the Aboriginal Pipeline Group (APG), have ended a joint venture that had proposed building a $20-billion pipeline to southern markets from the Mackenzie Delta region of the Northwest Territories.

"We recognize this is a disappointing day for the people of the North. This is a disappointment to Imperial and the other members of the joint venture, as well," Imperial vice-president Theresa Redburn said in a statement.

Story continues below advertisement

The Mackenzie pipeline had first been envisioned in the 1970s after the discovery of extensive gas reserves in the region. The consortium was formed in 2000. It brought together Indigenous communities to support, and eventually co-own, the development under the APG umbrella.

The 1,196-kilometre pipeline won approval from the National Energy Board in 2011 after a six-year regulatory process that included public hearings across the North. But by then the shale-gas revolution was in full swing, unlocking gas deposits in more accessible parts of the continent. That pushed down gas prices as development costs ballooned, making the project economically infeasible. Little work has been done since the approval.

Despite the years of delays, NWT politicians and local governments had held out hope for the Mackenzie project as a way to kick-start the economy in the sparsely populated region.

As recently as 2013, Imperial chief executive officer Rich Kruger had suggested that the partners' massive gas reserves could eventually feed a liquefied natural gas project on Canada's West Coast, although LNG developments there have stalled as well.

Delays in the Mackenzie project, and the industry's cancellation in recent years of plans to drill in the deepwater Beaufort Sea, have prompted the territorial government to study ways to develop some resources for the local populations, although major projects have yet to be announced.

Imperial and its partners did not disclose if winding up the joint venture would result in any financial writeoffs.

Report an error Editorial code of conduct
Tickers mentioned in this story
Unchecking box will stop auto data updates
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Comments are closed

We have closed comments on this story for legal reasons or for abuse. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

Cannabis pro newsletter
To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies