Ottawa hasn't offered to take a stake in the proposed $7-billion Mackenzie Valley natural gas pipeline, but the Deputy Prime Minister says a "long, lengthy" list of options are under consideration as the federal government and Imperial Oil Ltd. continue to negotiate a special fiscal arrangement for the project.

"We have not put any proposal on the table," Deputy PM Anne McLellan told reporters after a news report said Ottawa had offered to take a one-fifth stake in the project in exchange for fiscal breaks for Imperial and the other backers.

She called the suggestion of an equity stake "completely false."

"We have talked to Imperial because they came to us with the discussion around fiscal enhancements," she said. "In fact, fiscal enhancements . . . there are a long, long lengthy list of things that could, or could not be done. It is way too soon to say whether this government will choose to take a serious look at a package that is defined as fiscal enhancements."

Ms. McLellan said Ottawa has earmarked significant money, pointing to $500-million over 10 years for northern social and economic development that was promised in the summer. She said the key hurdle now is for the pipeline backers and northern communities to reach agreements on access to land deals along pipeline route in the Northwest Territories.

Imperial said yesterday's report on an equity stake was wrong.

"We are not seeking money from the federal government to help us build the project," said Pius Rolheiser, an Imperial spokesman. He said the "sensitive and confidential" negotiations are about "clarity on the fiscal regime" for the project.

The National Energy Board has asked Imperial to say by Nov. 18 whether the pipeline backers are ready for the public hearings to review the proposed development.

DAVE EBNER and STEVEN CHASE - Globe & Mail