The Mackenzie Valley Pipeline, an energy megaproject in Canada's North that has been proposed and debated for decades, is on hold again.

The 743-mile line would have transported natural gas from the Beaufort Sea to North American markets. Low natural gas prices forced the halt of the $16.2 billion project.

ConocoPhillips said Thursday that the five partners in the energy-development consortium have suspended funding for the project, which would have transported up to 1.2 billion cubic feet of natural gas a day.

The partners include an aboriginal group funded by Calgary-based TransCanada Corp, Exxon Mobil Corp., Royal Dutch Shell and Imperial Oil Ltd., also of Calgary.

"The co-venturers elected to suspend funding of the project due to a continued decline in market conditions and the lack of acceptable commercial terms," it said in a release.

The announcement follows a decision less than a week ago by ExxonMobil, ConocoPhillips, BP and TransCanada, to work toward developing natural gas reserves on Alaska's North Slope, which would be assessed as an alternative to a natural gas pipeline through Alberta.

Canada's National Energy Board approved the MacKenzie Valley project in December of 2010. The price of natural gas, already at a 10-year low, fell further Thursday after the U.S. government reported a surprisingly large increase in supply. Gas for May delivery fell four cents to $2.11 per thousand cubic feet in New York at midday.

The government said supplies expanded last week to a level that's 60.5 per cent higher than the five-year average.