Inuvik Gas Limited (IGL) is a partnership between Inuvialuit Petroleum Corporation (IPC), AltaGas Marketing Inc. (AMI), and IPL Holdings Inc. (IPLH) developed the Ikhil gas reservoir to supply natural gas to the Town of Inuvik.
A decade ago IGL tapped into the Ikhil gas field is located in the Caribou Hills, approximately 50 km to the northwest of Inuvik that is located within the Inuvialuit settlement region. The gas is produced from two wells (J-35 and K-35), processed through a centrally located production facility and transported through a 50 km, 150 mm (6 inch) diameter pipeline to a regulating and metering facility near the Northwest Territories Power Corporation (NWTPC) power plant in Inuvik. Gas is made available to the Town of Inuvik and its residents through a 45-km gas distribution system that is owned and operated by Inuvik Gas Ltd.
Inuvik Gas has yet to recoup the $50 million of capital invested in the Ikhil gas well it’s currently using, which had been expected to have enough gas for 20 years. Now, nine years short of the original contract, the well has only an estimated year and a half of gas left, unless its largest customer, the Northwest Territories Power Corporation, switches back to diesel. ICG could not have foreseen the unexpected deterioration of the gas wells that has occurred after so many years.
Over the past 12 years since Inuvik Gas started providing natural gas to the community, customers have saved $31 million. Compared to what they would have spent on diesel Inuvik Gas has more than 900 customers.
IGC has approached ConocoPhillips about using a reservoir at Parson’s Lake, located 75 km northeast of Inuvik. This would require a 30 km extension to the pipeline as well engineering issues would need to be resolved. ConocoPhillips is receptive to giving IGL access to the gas supply but does not want to invest capital in the project.
Parson’s Lake, located 75 km northeast of Inuvik and owned by ConocoPhillips, has enough natural gas to heat all the houses in Canada for two years.
The hope of IGC would be for contract drilling to occur in the 2012-13 winter season. The work can only be done in the winter with the use of ice roads, which have to go all the way to Parson’s Lake.
The ICG tripartite partnership is unique and successfully provided significant energy savings to the citizens of Inuvik over the past decade. Tapping into a secure supply at Parson’s Lake would seem to make sense for the community and for ICG.