Fort Good Hope (Feb 24/03) - The Aboriginal Pipeline Group (APG) has secured financing to see it through the next phase of building a Mackenzie Valley natural gas pipeline.

Fred Carmichael, CEO, announced last week in Fort Good Hope that the APG had successfully negotiated a financing arrangement.

"Our negotiating team has reached a tentative agreement on the terms of an arrangement under which the Aboriginal Pipeline Group can secure financing for its participation in, and ownership of, the proposed Mackenzie Valley natural gas pipeline."

"The tentative financing arrangement includes funding for the project definition phase of the proposed pipeline."

Carmichael was in Fort Good Hope to speak at one of a series of workshops on the pipeline proposal. Finalization of the arrangement is subject to legal drafting and approval by all parties, he said.

"Approval will also be subject to confirmation if the proposed arrangement is consistent with existing agreements, such as the Oct. 15, 2001, memorandum of understanding signed by the Mackenzie Valley Aboriginal Pipeline Corporation and the Mackenzie Delta producer's companies."

Carmichael would not elaborate on who the financing arrangement is with, but sources say TransCanada Pipelines Ltd. is backing the deal.

TransCanada spokesperson Glenn Herchak said in Calgary the company had no comment on the APG announcement.

Herchak said TransCanada has met with gas producers and aboriginal groups over the past two years but would not say if the APG is one of those groups.

"At this point it is not appropriate for us to comment on any discussions we may have had or may be having with individual stakeholders."

The estimated $210 million required for the project definition phase will be split between the producers and the APG, who required $70 million for their one-third share.

The project definition phase determines which route the pipeline will take, the cost of the line and, ultimately, whether or not the pipeline is commercially viable.

The producers group consists of Imperial Oil, ConocoPhillips, ExxonMobil and Shell Canada, who hope to tap an estimated six trillion cubic feet of natural gas in the Beaufort Delta and move it 1,800 kilometres to southern markets through a $4-billion pipeline.

The financing deal is expected to be signed this week.