Alaska Governor backs TransCanada pipeline bid

Thu May 22, 2008 6:00pm EDT
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By Yereth Rosen

ANCHORAGE (Reuters) - Gov. Sarah Palin of Alaska urged state lawmakers on Thursday to back a $26 billion gas pipeline proposal from TransCanada Corp, as the company wooed potential shippers with the prospect of owning part of the massive line.

TransCanada's proposal for a long-sought pipeline to ship natural gas to U.S. and Canadian markets from Alaska's North Slope was the only one of a handful that Palin accepted for consideration under state legislation to bolster development.

"We do have great confidence that the lawmakers are going to see the wisdom of this project, approving this project," she told reporters at a news conference.

Complicating TransCanada's aims, ConocoPhillips and BP Plc, two of Alaska's major oil producers, have submitted a competing $30 billion proposal. TransCanada would need their support as shippers on its pipeline.

Palin has said the rival plan falls short of the state's needs.

"On the one hand you have a series of contractual binding commitments to build the line on terms highly favorable to Alaskans," Palin said. "On the other hand, we have yet another idea to someday, maybe, build a line but with virtually no detailed information, no commitment, and a need for uncertain billions of dollars of concessions."

The Alaska legislature will begin considering the competing proposals in early June. If TransCanada is granted a license this summer, it would seek commitments from gas producers in an open season in 2009 or 2010.

TransCanada Alaska President Tony Palmer said his company's proposal to move Alaska gas through its Alberta pipeline system and onto Eastern Canada and the continental United States, would allow ConocoPhillips, BP and Exxon Mobil Corp to take an equity stake in exchange for committing to pipeline space.   Continued...