TransCanada stepping in to jump-start Mackenzie line?

According to the Financial Post, TransCanada Corp. appears to be stepping into the jump-start the stalled Mackenzie natural gas pipeline.

On Dec. 5 the newspaper reported that a deal restructuring the stalled Mackenzie line “appears to be close at hand, and would involve TransCanada Corp. and the Aboriginal Pipeline Group taking control away from a consortium of oil companies led by Imperial Oil Ltd., sources said yesterday.”

After six months in limbo because of increasing costs to build the line, “it appears the producers are prepared to step aside and let TransCanada, Canada’s largest pipeline company, take the lead with 60 percent ownership, with the rest going to the APG, a Calgary-based organization representing aboriginal groups in the North,” the newspaper reported.

“The new partnership is expected to seek help from Ottawa in the form of loan guarantees, shipping commitments or other breaks for the multi-billion-dollar project,” Financial Post sources said.

Under what the newspaper referred to “the so-called Plan B,” the oil companies that are part of the Mackenzie Gas Project — Imperial (almost 70 percent owned by ExxonMobil), Shell, ConocoPhillips and ExxonMobil — would become shippers with long-term commitments.

TransCanada involvement in the Mackenzie pipeline to date has been financing APG. The Financial Post said said its involvement in Plan B “would be welcomed by oil companies outside the Imperial partnership that would also like to ship gas on the system.”

The newspaper also said TransCanada’s “involvement is seen as improving the pipeline’s chances of success because the regulated company has lower profit expectations than oil companies.”

Rumors of the new deal surfaced in late November, around the time that two years of regulatory hearings on the Mackenzie line ended.

Imperial spokesman Pius Rolheiser would not comment on the rumors, the Financial Post said. Rolheiser told the newspaper that a decision from the National Energy Board on whether the project can move ahead is expected in mid-2009. A spokesman for TransCanada would also not comment.

—Kay Cashman