You should be able to run most any Lionel engine with the MTH Z-1000. You will need Lionel's command control system if you want command control from Lionel, MTH and Lionel command control systems(are not mix and match) need their respective base but can be added together.
My MTH Z-1000 works great with my Williams engines and older Lionel engines(before TMCC).
Not sure if the brick part can hook-up directly to the Lion Chief terminal track directly, but if you do you may lose speed control ability.
Lee Fritz