The oil companies behind the $7-billion Mackenzie Valley natural gas pipeline announced Thursday they had stopped most work on the project, saying there hasn't been enough progress in resolving several key issues, including access.

The pipeline partners said they remain committed to the project, but said progress has been so slow on bridging some differences that they are unwilling – at least for the time being – to commit more money.

"We are already months behind what our expectations were about how this would be carried out," Mike Yeager, an Imperial Oil senior vice-president, said.

The oil companies said they would stop project execution work like geotechnical data gathering, the start of detailed engineering, as well as work leading up to contracting for construction.

But they said they would continue "all work associated with advancing the regulatory review process."

The partners said "insufficient progress" had been made on resolving critical areas such as the fees the companies would pay for access to aboriginal land in the Northwest Territories.

Imperial Oil says it needs answers about how long it will take to get the thousands of permits needed for construction, preferably before public hearings on the project begin in the fall.

The company has been answering about 1,200 questions on the project submitted by government, aboriginal groups and others as part of the environmental assessment process.

Liseanne Forand, assistant deputy minister of Indian and Northern Affairs, says they are looking for ways to streamline the process the oil companies have to go through.

"But the bottom line to all of this, really, is we need to have a rigorous environmental assessment and regulatory process that all northerners and all Canadians will be able to count on in the end," Forand said.

Yeager also said negotiations with First Nations groups have bogged down, and that they are asking for too much.

"We're talking about something here that is many, many fold from what we were expecting and into the hundreds of millions of dollars," he said.

The expectation that the pipeline will provide them with enough money to address all their social problems, including a housing shortage, isn't realistic, Yeager said.

But Stephen Kakfwi, who is negotiating access and benefits for Fort Good Hope in the Mackenzie Valley, says aboriginal groups have to be compensated for the project.

"Unless we do something today, all the oil and gas will be gone from our land and everybody will get rich except us," he said.

Yeager says the government should address those concerns using money it will reap from taxes and royalties.

The Mackenzie Valley Gas Project would tap natural gas in the Mackenzie Delta and move it 1,300 kilometres into Alberta. The gas will then be moved on to U.S. markets through existing pipelines.

The project, spearheaded by Imperial Oil, also includes Shell Canada, Conoco Phillips, and ExxonMobil.

The Aboriginal Pipeline Group (APG), representing most of the aboriginal people of the Northwest Territories, have a one-third share of the project.

While the APG supports the pipeline project, the Dehcho First Nations do not.