Imperial Oil has announced it will not go ahead with the Mackenzie Gas Project, as the market conditions are just not good right now, says a company spokesman.
Imperial Oil had to give its decision on the construction of the pipeline to the National Energy Board by the end of 2013. The company was also required to provide an updated cost estimate.
But Pius Rolheiser, spokesman for Imperial Oil, says no construction doesn't mean the project is dead.
"I would emphasize that the approval, the certificate of public convenience and necessity that was issued to Imperial, continues to be valid and allows for activities to be ramped up should conditions change and as conditions change," he said.
Imperial Oil has until 2015 to start construction on the pipeline and gas fields in the Mackenzie Delta, otherwise it will have to go through another review.
Imperial has also released new estimates for the cost of the project.
Rolhieser says higher labour and material costs have now bumped up the price tag of the whole project to more than $20 billion from around $16 billion.