Canada's federal regulators have approved the Mackenzie Valley pipeline in the Northwest Territories after more than three decades of debate. The $16bn pipeline will bring Arctic natural gas to the Canadian market and create thousands of jobs. However, the challenge for stakeholders will be to determine the commercial viability of the project, compared to other supply sources such as shale gas.
The Canadian gas supply sector has really suffered in the last three years, with natural gas prices falling by 55% in 2008 due to the recessionary drop in gas demand from Canada and the US. At the same time, shale gas production came online all over North America, exacerbating the gas surplus. This surplus is leading pipeline operators to take desperate measures.
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