Natural gas fields in the Mackenzie and Beaufort Deltas are getting another look as a potential export product, but officials aren’t releasing the report just yet.
GNWT officials noted during the Arctic Development Expo on June 16 that a feasibility study on mining natural gas in the area, including the Inuvialuit Settlement Region, and shipping it to foreign markets from Tuktoyaktuk is now before the Inuvialuit Regional Corporation. A public copy of the report will be released at a later date.
Industry, Tourism and Investment Minister Caroline Wawzonek said she waived the need to seek approval the Inuvialuit Energy Security project, a plan to build a liquefied natural gas plant near the 3,000-metre deep TUK M-18 well which was initially dug in the early 2000s and the project was now before the Canada Energy Regulator. TUK M-18 sits approximately 17 kilometres southwest of Tuktoyaktuk.
“It’s their government for their people,” she said. “It really is their project, but we’ve been involved and continue to be supportive. There’s a potential that both Inuvik and Tuktoyaktuk could benefit from LNG.
“ITI has been looking at what are the reserves broadly in the region and what options there would be to take the LNG to the market.”
Wawzonek said the TUK-M18 project and ITI’s hopes to find potential markets for the Crown’s gas fields were separate endeavours.
In a presentation during the expo, GNWT manager of Oil and Gas planning Mike Harlow noted the Mackenzie and Beaufort Delta regions were sitting on a proven six trillion cubic metres of natural gas, with several trillion more potentially to be discovered and 25 trillion cubic feet of natural gas buried further out in the Beaufort sea. The natural gas is also of a higher quality, not needing a great deal of processing before use, and can be extracted without fracking — a practice proven to increase the chances of earthquakes.
He said the initial plan is to replace the need for imported natural gas in the Delta and then potentially expand into exporting to other jurisdictions.
“What’s unique about this project is the resources in question are owned by the IRC as part of the Inuvialuit Final Agreement,” he said. “The company pursuing it is the Inuvialuit Petroleum Corporation, which is a subsidiary of the IRC and the prime beneficiaries of this development will be local people, including Inuvialuit beneficiaries who live in Inuvik and Tuktoyaktuk.”
He said the GNWT was 100-per-cent behind the project, providing support in navigating the regulatory system, as well as providing cost-estimates for rates through the Northwest Territories Power Corporation.
Should the idea of export prove feasible, Harlow said the plan was to use LNG icebreakers to create shipping corridors out of Tuktoyaktuk, which would be transformed into a natural gas port. These are a Russian designed ship utilizing the rear-side of the vessel as an ice breaker and the front end for regular travel. Potential destinations have yet to be sussed out, but Harlow said the GNWT was enthusiastic enough about the idea to commission economic consulting firm Advisian to complete the feasibility study in January.
“The report, we have in hand,” he said. “We are reviewing it. Unfortunately at this time, we are not in a position to share any results from the report, negative or positive.”
Harlow said that because the project was entirely within the ISR, it “just made sense” to let the IRC have the first look at the report. He advised people to “stay tuned.”
Wawzonek said the study looks at what sort of technology is available, how it can be put in place to access the reserves and what options are available for transport by sea.
“There are starting to be options for offshore transfer stations, as well as on-shore transfer stations,” she said. “So pipelines and barges. We’re wanting to know where things are at technology-wise today, but also where they’re going to be in a few years, to the best of expert’s ability to predict.”
She added the GNWT wasn’t looking to be a proponent of the project but would seek out an investor to get any potential project going. She noted she still needed to speak with the IRC about the report.
She said she had met with IRC President Duane Ningaqsiq Smith at a recent leader’s conference, but said she expected talks on icebreakers would not proceed until a final decision has been given about TUK M-18, though she remained optimistic the report would be public by the fall.