SOMBA K'E/YELLOWKNIFE - Initial reactions to the National Energy Board's approval of the Mackenzie Gas Project are positive yet dampened by the feeling a window of opportunity for the long-delayed pipeline may have been missed.

On Thursday, the board granted its regulatory approval for the $16.2 billion pipeline - six years after the proponents, led by Imperial Oil, submitted their major application for the project.

"I'm elated, of course, that it's a go," said O.D. Hansen, manager of communications for the Aboriginal Pipeline Group. The group stands to distribute one third of the pipeline's profits among the NWT aboriginal groups whose territory falls along the pipeline's path.

"Usually when you get a permit, (the reaction) should be one of unbridled joy because it's a signal to go ahead," added Hansen.

But that isn't the case with the pipeline, he said, "because of some of the issues - low (natural gas) prices being one of them - and because we need some type of fiscal framework agreement with the federal government to ensure that this project is economical."

The board's approval of the project is dependent on more than 200 conditions being met by the proponents, which include Exxon Mobil Corp, ConocoPhillips and Royal Dutch Shell PLC.

Among the requirements: that construction of the 1,200-kilometre pipeline begin by the end of 2015.

Pius Rolheiser, spokesperson for Imperial Oil, said meeting that deadline could prove difficult if a positive fiscal agreement with the federal government is not in place.

"We would need to have sufficient confidence in a fiscal agreement with the federal government before we could make a decision to restaff the project and resume engineering work, permitting work," said Rolheiser.

That work will take three years to complete, with several thousands of permits needed before construction can begin. Imperial Oil previously requested to have until 2016 to decide whether to proceed with building the pipeline.

The board's decision calls for the proponents "to file an updated cost estimate and report on their decision to build the pipeline" by the end of 2013.

Whether that clause means the proponents must update the board on the progress the project is making - or whether it means Imperial Oil and others must decide to construct the pipeline in 2013 - is still unclear.

"It's vague enough that you can interpret it either way," said John Hogg, vice-president of exploration and operations for MGM Energy.

"With three of us in the office, there was 66 per cent saying, 'We felt they meant that (the NEB) were just to report back on how they were doing.' But other people believe that means they have to tell them in 2013."

Sarah Kiley, a spokesperson for the National Energy Board, said the report speaks for itself - and the board can't clarify what it wrote.

"...the panel is now (defunct), so I couldn't even ask them..." said Kiley.

Though "absolutely ecstatic" the pipeline has received regulatory blessing, Ann Marie Tout, president of the NWT Chamber of Commerce, said it's difficult to balance what she and Northerners want - a pipeline that takes shape as soon as possible - with what the proponents want - a pipeline that comes online when natural gas prices are strong enough to warrant it.

"I think for the sake of the Northern economy, the sooner the decision is made (to build it), the better, although I would hate to see the proponents forced into a decision that they don't think they have the economic information needed to make," said Tout.

The delays of the Joint Review Panel - which took several more years to release its pipeline report than originally intended - have placed the pipeline proponents at a disadvantage, added Tout.

"The regulatory process that the Mackenzie Gas Project has faced to date has certainly not been positive in terms of (the proponents') ability to get the project on the books when it made the most sense economically."

The Henry Hub spot price for natural gas - the pricing point for natural gas futures contracts traded on the New York Mercantile Exchange - closed at US$4.02 per 1,000 1,000 thermal British Units (MMBtu) yesterday - considerably below the $6 to $7 price range experts say is needed to make the Mackenzie Gas Project economical.

By comparison, gas prices reached $14 per MMBtu in 2006, when the panel's public hearings began.

Though fears about the economic prospects for the timeline remain, the board's greenlight of the pipeline is already spurring one oil and gas exploration company to think ahead to the future.

Little more than an hour after the board's decision went public, Hogg said of MGM, "We're optimistic now that we're going to be back on the Delta drilling in the winter of 2013 as long as we see some clear direction to conclude the fiscal arrangements by the proponents and the federal government by then."

In addition to spurring further oil and gas development in the NWT, the Mackenzie Gas Project is expected to create 5,700 jobs over the course of construction.

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