CALGARY — A report that Ottawa won’t provide subsidies to the long-stalled Mackenzie natural gas pipeline is casting further doubt on the project’s future.
CBC News says the federal cabinet is set to approve the project soon, but will not provide any funding for the $16.2-billion undertaking.
“In the absence of some sort of federal largesse, this project just isn’t going to go, period,” energy consultant Doug Matthews said. “If the project required federal support before, when gas prices were high, then you have to look at how much more support may they need now, with gas prices low, and a lot of competitive supply on the market.”
The Mackenzie Gas Project would connect natural gas fields from the near the coast of the Beaufort Sea in the Northwest Territories to southern markets.
A spokesman for Imperial Oil Ltd. (TSX:IMO), the lead partner of the project, said there has been no indication as to whether cabinet will approve the project, or when it may do so.
“We’re continuing to await a decision from cabinet, which would be the final step in the formal regulatory process,” said Pius Rolheiser.
“Once that’s obtained, then we would then look to re-engage with the federal government in our ongoing dialogue on fiscal framework for the project.”
The National Energy Board gave the green-light to the project last month, a key milestone in a drawn-out regulatory process.