Canadian Arctic gas pipeline faces new delay

Fri May 16, 2008 3:22pm EDT
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By Jeffrey Jones

CALGARY, Alberta (Reuters) - A key regulatory report for the C$16.2 billion ($16.2 billion) Canadian Arctic gas pipeline is being delayed by several months, likely pushing the start-up date for the stalled development back again.

The Joint Review Panel report into the environmental and social impacts into the Mackenzie Valley pipeline will not be published until next year, an official with the panel's administrative arm said on Friday.

Project lead Imperial Oil Ltd had expected the report to be completed by October, spokesman Pius Rolheiser said.

"The JRP has not officially communicated this to us, but it's our understanding via the Northern Gas Project Secretariat and comments they made that it's now unlikely that we will see a report until sometime in 2009," Rolheiser said.

It is the latest setback for a project that has been hit with many. It would be North America's first major Arctic gas development.

"Obviously, this is going to have a negative impact on the project schedule," Rolheiser said.

The pipeline's backers have also been locked in lengthy talks with Ottawa over their request for fiscal breaks that would make the line economically viable.

Besides royalty and tax measures, the proponents have said they want the federal government to pay for some items, such as roads and other infrastructure.   Continued...