A C$7 billion Canadian Arctic gas pipeline is expected to take a big step closer to reality as early as next week because disagreements over access to native lands are being ironed out, a top aboriginal negotiator said on Thursday.

Imperial Oil Ltd., lead company in the Mackenzie Valley Pipeline group, is slated to tell the National Energy Board on November 18 how close it is to putting the public-hearing process for the delayed development back in motion.

"Many of the items they felt that they had to get off the table are getting close to finalization," said Nellie Cournoyea, chief executive of the Inuvialuit Regional Corp., which represents native communities on a large portion of Northwest Territories land.

"With the effort the aboriginal groups are putting into trying to resolve those issues and get an access and benefits agreement ... it looks like they could be in a situation in a matter of a short period of time to say, 'Yes we've got enough that we know what the agreements are going to be'."

Cournoyea's comments, made to reporters after a luncheon in Calgary, were the second positive ones this week for the stalled proposal to tap badly needed deposits of gas on the Beaufort Sea coast and ship it to Canadian and U.S. markets.

On Tuesday, Rex Tillerson, president of Mackenzie partner Exxon Mobil Corp., said he believed there had been progress on major sticking points and that he expected the group will move the project "across the finish line."

In April, Imperial Oil put the brakes on all physical work on the development, saying the partners needed to address spiraling cash demands from native groups in exchange for allowing the pipeline to cross their lands.

The companies also wanted to find ways to cut the costly regulatory labyrinth of approvals and have asked Ottawa for a royalty regime the reflects the project's high initial cost.

Cournoyea, a former Northwest Territories premier, said she did not know the state of talks on the royalty and tax issue, but stressed she and other negotiators are optimistic a positive announcement is near.

"We want to get on with the pipeline, and we feel a lot of the issues that are important to us have been dealt with," she said.

Imperial cautioned there is no "mystique" about the November 18 date, and that the company may simply inform the regulator that it needs more time before deciding on moving forward or not.

Regulators have said they would take 60 days from getting a positive notice from the oil companies to prepare for the start of lengthy public hearings into the pipeline, which could ship up to 1.9 billion cubic feet a day.

Hearings had initially been expected to start by September, but the partners pushed the date back to solve the key issues.

Imperial spokesman Pius Rolheiser acknowledged progress has been made since October 6, when Tim Hearn, the company's chief executive, warned the project could be stalled for years unless the financial issues were sorted out in short order.

Hearn had said more delays could allow another project, the much larger Alaska Highway pipeline, to overtake Mackenzie.

Cournoyea said she did not believe that to be possible.

"Even though we have some difficulties, they (Alaska proponents) have a great deal more to come though, and even if they were told, 'Yes, go ahead today,' I would say it takes seven to eight years just to get where we are," she said.
She is also a director of the Aboriginal Pipeline Group, which has the right to acquire up to a third of the Mackenzie Valley Pipeline. The other partners are Shell Canada Ltd. and ConocoPhillips.

Jeffrey Jones - Reuters