Planes, trains and automobiles - and barges.
That's what it will take to pull off the ambitious Mackenzie Gas Project in Canada's far north, say the project's operators and the transporters hoping to tap into a piece of the action.
The proposed $7-billion venture aimed at carrying High Arctic natural gas to markets in Canada and the United States poses a number of logistical challenges for transporting the workers, equipment and supplies from the south and getting it to remote locales in the Northwest Territories' Mackenzie Valley.
Most of the equipment and inputs - two-thirds being pipe and diesel fuel - will be shipped north from Edmonton and Calgary by rail and truck transport. Once these materials are in the north, barges will move much of the cargo downstream to construction sites along the Mackenzie River.
Imperial Oil Ltd., which leads a four-member consortium - the partners include ConocoPhillips, Shell Canada and ExxonMobil - says intensive groundwork has gone into the planning phase of the project. However, Canada's largest oil and gas producer also has enough experience to know that things don't always go by the book.
"I think we have a good understanding of the transportation issues, the logistics and requirements associated with the project," says Hart Searle, Imperial Oil spokesman. "Of course, it's not until you actually have to do it that you have the most direct feel and understanding."
In all, roughly 900,000 tonnes of machines and materials will be moved through the Mackenzie Valley during the construction life of the project, expected to begin in late 2006 and end in 2009. In addition, about 7,000 workers - many locals, but also a great number of outsiders - must be shuttled in and out by air, land and river.
Existing road infrastructure in the region includes the 800-kilometre Dempster Highway from Dawson City, Yukon, to Inuvik in the Northwest Territories, and the 555-kilometre Mackenzie Highway from Hay River to Fort Simpson and Wrigley. Winter roads must be constructed and maintained, as well as 430 kilometres of new roads, with some needed for multiple winter seasons.
Airstrips and helipads may be required at each of the main construction camps for moving workers and supplies, and for emergency medical evacuation. Existing airports at Inuvik, Fort Good Hope, Norman Wells, Fort Simpson, Hay River and Yellowknife will be used for the project.
River transport will also play a key role in the success of the project. The Northern Transportation Co. Ltd. (NTCL), a shipping company with 75 years of experience moving freight and passengers around the N.W.T., will likely receive a big piece of the barge-transportation pie.
The additional work that could come its way is forcing NTCL to scour North America to find a yet-to-be-determined quantity of low-draft barges and tugboats - the Mackenzie River is one of the world's shallowest navigable waterways - to ensure it will not only accommodate the Mackenzie project's needs, but maintain its commitments to re-supply small communities up the valley.
The carrier must also be careful to manage these new acquisitions to ensure it's not saddled with excess equipment once the pipeline is built, says Carmen Loberg, president of Edmonton's NorTerra Inc., the aboriginal-controlled holding company that owns NTCL and Canadian North, a regional airline that would also likely serve the Mackenzie project.
"We want to make sure (the project) doesn't create a nasty hangover of excess equipment after it's all done," Loberg says.
And then there's the harsh climate. Mullen Transportation Inc.'s CEO and chairman Murray Mullen says working so far north in the middle of winter can be hard on both workers and equipment.
He wonders whether contractors that don't have a great deal of experience working in the region understand what they could be getting into.
"If you're fortunate enough to get any work, that's just the start of your problems," Mullen says. "Then there's executing and doing a good job, and making sure you don't hurt people."
The project is expected to generate economic activity throughout the region.
While NTCL has a full complement of skilled marine captains to operate the vessels, a green light for the Mackenzie project would mean the company would have to hire additional shore personnel and mess staff for the barges, Loberg says.
Prolog Canada Inc., a Calgary consulting company that completed a study on transportation issue surrounding the Mackenzie project, says there will be big opportunities for local operators from the small communities up and down the river to haul fuel, water and gravel short distances from barge docks and borrow sites - local gravel beds - to the pipeline right-of-way.
"There's a hell of a lot of gravel that has to be moved up there," says Don Dean, a principal with Prolog. "In terms of tonnage - albeit short moves - it will probably be four times the freight tonnage of the direct supplies of the pipeline."
The Mackenzie Gas Project is by no means a sure thing. The Deh Cho band, which claims land on 40 per cent of the pipeline's route along its southernmost leg, recently reactivated a lawsuit calling for any pipeline approvals to be declared invalid.
Deh Cho chiefs, who are currently also negotiating a land claim, want final say over any development on what they consider their lands.
The venture must also receive federal regulatory approval.
(John Ludwick can be reached at ludwick@businessedge.ca)
