It’s a deal — almost.
Canadian newspapers have been abuzz this week with reports that a tentative pact was reached over the weekend by TransCanada PipeLines Ltd. and the Aboriginal Pipeline Group to raise hopes for the proposed Mackenzie Valley gas pipeline.
A number of Native leaders in the Northwest Territories say the basis of a deal is in place, although the final terms are still being negotiated. A formal announcement is expected within a month.
Frank T’seleie, chief of the K’ahsho Got’ine in Fort Good Hope told the Globe and Mail newspaper that TransCanada will cover the APG’s requirement to pay C$70 million share of the preliminary engineering and regulatory work for the pipeline.
He said that in return for paying the preconstruction costs, TransCanada will build the pipeline and, under certain conditions, acquire a 4 percent to 5 percent equity stake from the producers who would supply the volumes to fill the APG’s one-third stake.
APG chairman Fred Carmichael issued a statement confirming a preliminary agreement, although it has yet to be confirmed that the arrangement is consistent with last year’s memorandum of understanding (MOU) between the APG and the Mackenzie Delta Producers Group.
Carmichael told the Calgary Herald that, in addition to the C$70 million, another C$300 million in financing has been secured to pay for the APG’s overall investment in the pipeline.
Carmichael confirmed earlier this week that the deal would not involve the APG reducing its one-third equity position, a prospect that had caused some disquiet within the producers’ group if it meant the APG would sell part of its equity stake to another party.
TransCanada and the producers have refused to comment on confidential negotiations until the pieces are in place that will allow a formal announcement.
