Imperial Oil Ltd. isn't ready to proceed with its $7-billion Mackenzie Valley natural-gas pipeline, the company's chief executive said Thursday, arguing record-high gas prices can't be counted on over the life of the project
Tim Hearn said he's not ready to ask regulators to approve the project. The company halted work on the line in April, citing demands for cash from communities and groups along the line's route and excess bureaucracy.

While the federal government stepped in with up to $500 million in new funding for Mackenzie Valley communities, Hearn said Imperial is still not convinced the line will earn its keep.

"We are not asking for handouts," he said. "We are looking at a fiscal framework that will make the pipeline economic ... Today, under current conditions we don't have an economic project."

Imperial is the lead partner in the proposed line, which could carry as much as 1.9 billion cubic feet of gas a day 1,220 kilometres from the Mackenzie Delta to Alberta.

ConocoPhillips, Shell Canada Ltd., Exxon Mobil Corp. and the Aboriginal Pipeline Group also have stakes.

Although natural gas has traded above $14 US per million British thermal units in New York this week, Hearn told reporters that Imperial wasn't counting on current prices for planning the Mackenzie project. He said burgeoning imports of liquefied natural gas will eventually bring down prices.

While the pipeline is still scheduled to be completed by the end of the decade, construction could be delayed if regulatory hearings don't start this year.

Scott Haggett