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Canadian Gas Megaproject Gets Nod But Future Cloudy

Date: 17-Dec-10
Country: CANADA
Author: Jeffrey Jones and Scott Haggett

Canada's energy regulator said on Thursday it approved plans for a C$16.2 billion ($16.1 billion) Arctic gas pipeline, a project that faces growing economic pressure as natural gas prices languish.

The National Energy Board, following six years of deliberations, said the Mackenzie Gas Project is in the public interest provided that the major oil companies that are backing it meet more than 200 environmental and socioeconomic conditions.

"We examined the benefits the project can bring. We found that they are large and varied," the board said in its ruling. "We also looked at the negative impacts. We found that they can be minimized and are acceptable."

The project, first envisioned in the 1970s, is led by Imperial Oil Ltd. Its partners are Royal Dutch Shell, ConocoPhillips, Exxon Mobil Corp, and Aboriginal Pipeline Group.

The federal government still needs to sign off on the approval.

The NEB said the companies must provide an updated cost estimate and make a go-ahead decision by the end of 2013 and construction must start by the end of 2015.

The government of the Northwest Territories and many residents of northern Canada have been anxiously awaiting a decision on the massive development, which they say has the potential to create jobs and spinoff businesses, especially in regions where traditional livelihoods are vanishing.

Some environmental groups have opposed the Mackenzie project, arguing it would disturb pristine wilderness.

The Mackenzie pipeline would carry as much as 1.2 billion cubic feet of gas a day to the Alberta border from the Mackenzie Delta on the Beaufort Sea coast.

(Editing by Peter Galloway)

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