December 5, 2008 / 4:33 PM / 9 years ago

Canada Arctic pipeline faces 1-year regulatory wait

CALGARY, Alberta (Reuters) - A regulatory panel weighing a proposal for a C$16.2 billion ($12.5 billion) pipeline to ship gas from Canada’s Arctic will not complete its report for one year, spelling another in a long list of delays for the embattled project.

The Joint Review Panel, which is examining the environmental and socioeconomic impacts of the Mackenzie Valley Pipeline, said it will release its report in December 2009, months later that expected.

“We understand that there is tremendous interest in the panel’s findings, but we are required and committed to base our findings on a full and fair review of the evidence,” Robert Hornal, the panel’s chairman, said in a statement.

The pipeline, slated to tap massive gas fields under the Mackenzie River’s arctic delta, was originally expected to be complete by 2011.

But the line has been stalled as its backers looked to cut ballooning costs and regulators repeatedly extended their deadlines for ruling on the project.

The JRP report is needed before Canada’s National Energy Board, which held public hearings at the same time as the panel, can make its ruling on whether the project can proceed.

Imperial Oil Ltd, which is leading the five-company consortium looking to build the line, said it does not yet know what impact the delay will have on its plans.

“It’s clearly a disappointment for us and for the project,” said Pius Rolheiser, a spokesman for Imperial. “This is well beyond anything that we had expected ... We’ll have to sit down and consider what this might mean.”

Canadian Environment Minister Jim Prentice, who oversees the project, told Reuters earlier this week that he expected the Joint Review Panel to deliver its report no later than May of 2009.

“I am disappointed to hear that that is the projected timeline ... I’ve always acknowledged that the project is a complex one,” Prentice told Reuters on Friday, saying he still remained optimistic that the pipeline would be built.

The line would ship up to 1.9 billion cubic feet of gas per day 1,200 kilometers (750 miles) along the Mackenzie River Valley to Alberta, where it would link with lines serving Canadian and U.S. markets.

Imperial’s partners in the project include Royal Dutch Shell Plc, Exxon Mobil Corp ConocoPhillips and the Aboriginal Pipeline Group.

A spokesman for Imperial could not be immediately reached.

($1=$1.30 Canadian)

Reporting by Scott Haggett and Jeffrey Jones; editing by Peter Galloway

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