Canada's federal government has offered financial support for the Mackenzie gas pipeline, a multibillion-dollar project that has been held back by regulatory delays and cost overruns.
Jim Prentice, the federal minister in charge of pipelines, would not disclose Monday how much federal money is on the table, telling reporters that formal negotiations are still under way.
"I'm not going to negotiate through the media, but it is a reasonable offer we've put forward," said Prentice, who is also the federal environment minister.
The Mackenzie Gas Project is a proposed 750-mile (1,200-kilometer) natural gas pipeline through the Mackenzie Valley of Canada's Northwest Territories to connect a dozen potential northern onshore gas fields with North American markets.
The government offer includes a contribution to infrastructure, including barge landings and airstrips, to make the remote Arctic region more accessible, as well as pre-construction costs.
Ottawa would also share "risks and returns" with the producers, though Prentice declined to say how big of an ownership stake the federal government would like in the project.
The money will not be part of any economic stimulus package to be included in next week's budget, to be released Jan. 27, he added.
The Mackenzie Gas Project is led by Imperial Oil Ltd., joined by ConocoPhillips, ExxonMobil and Shell Canada Ltd. as well as three aboriginal communities in the region.
Pipeline operator TransCanada Corp. also has a stake in the project through its investment in the Aboriginal Pipeline Group.
"Obviously this is a very important project to our country, to Canada's north and in terms of our energy future and energy security," Prentice said.
The last official estimated cost for the project was $12.8 billion in early 2007, but it is not clear how the price tag may have changed since then.
"There certainly have been discussions about cost estimates and we are in an environment where the costs are reduced from some of the previous estimates that were taken at a point in time when the economy was quite heated," Prentice said.
Prentice met Monday with representatives of the APG, Imperial, ConocoPhillips, Shell and MGM Energy Corp., which operates gas fields in the region.
Imperial spokesman Pius Rolheiser declined to comment on the negotiations, other than to say the company looks forward to "continuing the constructive dialogue" that will move the project forward.
A joint review panel examining the environmental and socio-economic impacts of the pipeline said last month it would take another year to complete a long-awaited impact report _ the latest in a series of delays.
"We'll continue to make sure they have the resources to get the job done," Prentice said.
"We would all like to see the report as soon as possible."
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