Alaska House Approves $26.6B TransCanada Gas Pipeline Plan

SAN FRANCISCO (Dow Jones Newswires), July 23, 2008

The Alaska House of Representatives approved a bill late Tuesday that would award TransCanada Corp. (TRP) an exclusive license to build a $26.6 billion natural gas pipeline from Alaska's North Slope to Alberta, Canada.

The proposal, by Republican Gov. Sarah Palin, could go up for another vote by the state House on Wednesday, under what's called "reconsideration." If the bill doesn't fail in a reconsideration vote, it would proceed to the state Senate, which has until midnight, Aug. 2, to vote on the proposal under the terms of the Alaska Gasoline Inducement Act.

The bill passed the state House 24-16.

If the legislature approves the bill, the state would grant TransCanada a state license to build a 1,678-mile pipeline to ship natural gas from North Slope gas fields to consumers in the lower 48 states. Alaska also would provide Canada's largest pipeline company with $500 million in state subsidies.

TransCanada would have to seek approval from U.S. and Canadian regulators for the pipeline.

Oil majors BP PLC (BP) and ConocoPhillips (COP) recently disclosed a plan to build a natural gas pipeline from Alaska that would compete with the TransCanada project. The companies, along with Exxon Mobil Corp. (XOM) hold rights to most of the North Slope gas.

Gov. Palin has urged Alaska lawmakers to proceed with the state's plan to back TransCanada's pipeline proposal, rather than change state law to allow the BP-Conoco plan to compete for the state's license.

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