UPDATE 3-Canadian Arctic gas pipeline faces further delay

* Pipeline sanction, start-up pushed back again

* Regulatory deals, lack of fiscal deal blamed

* Imperial still committed to project (Adds reaction)

By Jeffrey Jones

CALGARY, Alberta, March 15 (Reuters) - Backers of a C$16.2 billion ($15.9 billion) Canadian Arctic gas pipeline have pushed back its planned start-up by another four years, blaming regulatory delays and lack of a financial deal with Ottawa.

The Mackenzie Gas Project in the Northwest Territories is now not expected to start up before 2018 after the partners, led by Imperial Oil Ltd (IMO.TO), told regulators that a go-ahead decision will likely be made in late 2013.

Despite the latest delay in the development, which was first envisioned in the 1970s, Imperial said it is not giving up as a study shows the gas will be needed.

"We've never said anything but that we remain committed to the project and we're working on a successful path forward," Imperial spokesman Pius Rolheiser said.

When the Mackenzie partners filed their applications with the National Energy Board in 2004, project start-up was planned for 2009. The last estimate, made three years ago, was 2014.

The line would ship as much as 1.2 billion cubic feet of gas a day to southern markets from fields in the Mackenzie Delta region on the coast of the Beaufort Sea.

Many northern communities are banking on the project to help bring in a new era of economic independence, but it has been mired in a regulatory process that has dragged on years beyond the initial timeframe.

Final arguments before the NEB are scheduled for April and the board expects to make its approval decision in September.

More than a year ago, the Canadian government offered the partners a package of financial support -- estimated to be worth in the billions of dollars -- aimed at making the project economically viable, but the parties have yet to reach a deal.

Both sides have said confidentiality agreements have prevented them from talking about the sticking points.

The lack of such a deal and the need to restaff the project and apply for thousands of permits for construction activities, such as crossing streams and excavating gravel, have pushed the sanctioning date back, Rolheiser said.

"There's a significant regulatory component beyond the NEB's Certificate of Public Convenience and Necessity, which is the major regulatory application," he said.

The new schedule is positive even if it puts the project on a longer track, said Benoit Beauchamp, executive director of the University of Calgary's Arctic Institute of North America.

"This news, especially if it's fairly committal, will be quite welcome, actually. It's better than coming outright and saying the project will not go ahead," Beauchamp said.

Since the initial application, the industry has developed technology to unlock huge reserves of shale gas located closer to major markets, changing the dynamics of the gas market.

A much-larger Alaska gas pipeline has also made strides, raising fears that it could overwhelm Mackenzie.

But with its letter to the NEB, Imperial filed an updated supply and demand analysis, which concluded that the North American market would still need the gas, even with the addition of liquefied natural gas imports.

The study, by Angevine Economic Consulting Ltd, said consumption is expected to keeping climbing with increasing demand for gas-fired power generation as well as for fuel for a burgeoning Alberta oil sands industry.

Meanwhile, gas supplies from conventional fields in Canada and the United States are expected to keep declining, it said.

The other Mackenzie partners are Royal Dutch Shell Plc (RDSa.L), ConocoPhillips (COP.N), Exxon Mobil Corp (XOM.N) and the Aboriginal Pipeline Group.

($1=$1.02 Canadian) (Reporting by Jeffrey Jones; editing by Peter Galloway and Rob Wilson)