Fort Good Hope (Feb 21/03) - The Aboriginal Pipeline Group have secured financing to see them through the next phase of building a Mackenzie Valley natural gas pipeline.

Fred Carmichael, CEO of the Aboriginal Pipeline Group, announced Monday 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," Carmichael said.

"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 subject to terms

"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.

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 the 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 early next week.