CALGARY, Alberta, Oct 27 (Reuters) - The Canadian minister overseeing the C$16.2 billion ($15.1 billion) Mackenzie Valley gas pipeline said on Tuesday that project backers are still assessing his offer of financial support, but would not comment on whether cabinet has pulled its support.
Environment Minister Jim Prentice made the remarks in response to a report in the National Post newspaper, quoting unnamed sources, saying that federal cabinet members had turned down a series of support measures due to cost concerns.
'The proponents continue to assess the fiscal framework that has been put forward previously by the government,' Prentice told reporters in Ottawa.
Last January, he offered a series of measures intended to improve the long-delayed project's viability, including money for infrastructure projects such roads and airstrips, as well as pre-construction expenses.
Nothing has been said publicly about what has held up an agreement on the package.
Imperial Oil Ltd, the Mackenzie project's lead partner, said it was unaware of any changes to the federal government's support.
'All I can tell you with any certainty is we haven't heard anything,' said Pius Rolheiser, a spokesman for the company.
He also said discussions about the support package were still going on. Rolheiser declined to say if the backers had proposed changes to the package.
The planned 1,220 km (760 mile) line through the Northwest Territories would tap gas fields under the Mackenzie River Delta in the Arctic, delivering as much as much as 1.9 billion cubic feet of gas a day to southern markets.
The proponents, which also include Royal Dutch Shell Plc , ConocoPhillips, Exxon Mobil Corp and the Aboriginal Pipeline Group, have not yet decided to proceed with the project and are still awaiting regulatory clearance.
Low natural gas prices and burgeoning supplies from shale gas developments in the United States and Canada may also affect the viability of the project.
'The Mackenzie Valley Pipeline project, as I have said previously is a private-sector investment that needs to make sense on an economic basis under market principles,' Prentice said.
The Joint Review Panel, the regulator weighing the project's environmental and socioeconomic impact, is due to release its report in December, and the National Energy Board has said it will hear final arguments in April.
Bob McLeod, the Northwest Territories' minister of industry, tourism, and investment, said he saw Prentice and Indian and Northern Affairs Minister Chuck Strahl on Friday and was given no indication of a change in government thinking.
McLeod, whose sparsely populated region is counting on the project for economic development, has warned that Mackenzie could be overtaken by the proposed $26 billion Alaska pipeline, which has recently gained momentum.
The U.S. government recently moved to boost loan guarantees for that project to $30 billion from $18 billion.
'We're still of the view that the (Canadian) government needs to find the political will to make this project happen,' McLeod said of the Mackenzie line.
($1=$1.07 Canadian)
(Reporting by Scott Haggett, Jeffrey Jones and David Ljunggren; editing by Rob Wilson) Keywords: CANADA ENERGY/PIPELINE (scott.haggett@thomsonreuters.com; Reuters Messaging: scott.haggett.reuters.com@reuters.net; +1 403 531-1622) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Environment Minister Jim Prentice made the remarks in response to a report in the National Post newspaper, quoting unnamed sources, saying that federal cabinet members had turned down a series of support measures due to cost concerns.
'The proponents continue to assess the fiscal framework that has been put forward previously by the government,' Prentice told reporters in Ottawa.
Last January, he offered a series of measures intended to improve the long-delayed project's viability, including money for infrastructure projects such roads and airstrips, as well as pre-construction expenses.
Nothing has been said publicly about what has held up an agreement on the package.
Imperial Oil Ltd, the Mackenzie project's lead partner, said it was unaware of any changes to the federal government's support.
'All I can tell you with any certainty is we haven't heard anything,' said Pius Rolheiser, a spokesman for the company.
He also said discussions about the support package were still going on. Rolheiser declined to say if the backers had proposed changes to the package.
The planned 1,220 km (760 mile) line through the Northwest Territories would tap gas fields under the Mackenzie River Delta in the Arctic, delivering as much as much as 1.9 billion cubic feet of gas a day to southern markets.
The proponents, which also include Royal Dutch Shell Plc , ConocoPhillips, Exxon Mobil Corp and the Aboriginal Pipeline Group, have not yet decided to proceed with the project and are still awaiting regulatory clearance.
Low natural gas prices and burgeoning supplies from shale gas developments in the United States and Canada may also affect the viability of the project.
'The Mackenzie Valley Pipeline project, as I have said previously is a private-sector investment that needs to make sense on an economic basis under market principles,' Prentice said.
The Joint Review Panel, the regulator weighing the project's environmental and socioeconomic impact, is due to release its report in December, and the National Energy Board has said it will hear final arguments in April.
Bob McLeod, the Northwest Territories' minister of industry, tourism, and investment, said he saw Prentice and Indian and Northern Affairs Minister Chuck Strahl on Friday and was given no indication of a change in government thinking.
McLeod, whose sparsely populated region is counting on the project for economic development, has warned that Mackenzie could be overtaken by the proposed $26 billion Alaska pipeline, which has recently gained momentum.
The U.S. government recently moved to boost loan guarantees for that project to $30 billion from $18 billion.
'We're still of the view that the (Canadian) government needs to find the political will to make this project happen,' McLeod said of the Mackenzie line.
($1=$1.07 Canadian)
(Reporting by Scott Haggett, Jeffrey Jones and David Ljunggren; editing by Rob Wilson) Keywords: CANADA ENERGY/PIPELINE (scott.haggett@thomsonreuters.com; Reuters Messaging: scott.haggett.reuters.com@reuters.net; +1 403 531-1622) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.