MONTREAL, Dec 15 (Reuters) - Proponents of Imperial Oil Ltd’s (IMO.TO) proposed C$16.2 billion ($15.9 billion) Mackenzie Valley gas pipeline have submitted a financial plan for the project, which Canada’s Industry Minister said he will review as quickly as possible.
Government officials declined to divulge financial details of the plan, which calls for the construction of a 1,220-km (758-mile) pipeline and gas-gathering system, and the development of three gas fields in the Northwest Territories.
The Mackenzie line could deliver as much as 1.9 billion cubic feet of gas a day from fields in the Mackenzie Delta, on the Beaufort Sea north of the Arctic Circle, to southern markets in Alberta, the rest of Canada and the United States.
As owner of the gas fields, the government has a responsibility to define its fiscal framework, but Industry Minister Jim Prentice reiterated that Ottawa has no plan to take up an equity stake in the project.
“The Government of Canada has no interest in owning any portion of the project or in subsidizing petroleum companies,” Prentice said in a statement issued on Friday night.
Earlier this week, TransCanada Corp (TRP.TO) said that taking a lead role in the pipeline is only one in a range of options being mulled to revive the costly project.
Estimated costs for the line have more than doubled since 2004, when its backers assumed it could be built for C$7.5 billion. At C$16.2 billion, Imperial has said the line may be too expensive to be profitable and has looked for government concessions that could reduce risk and financing costs and boost returns.
TransCanada, the country’s No. 1 pipeline company, does not have a direct stake in the project, but is earning a share in the line through financial support for the Aboriginal Pipeline Group, owned by communities along the Mackenzie line’s route.
$1=1.017 Canadian Reporting by Robert Melnbardis; Editing by Eric Beech