Alaska governor signs natgas pipeline license bill

Wed Aug 27, 2008 9:05pm EDT
 
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By Yereth Rosen

ANCHORAGE, Alaska (Reuters) - Gov. Sarah Palin on Wednesday signed a bill giving the state authority to award TransCanada Corp TRP.T a license to build and operate a multibillion-dollar pipeline to ship natural gas from the North Slope.

The line, which the company estimates will cost $26 billion to build, would ship about 4 billion cubic feet of natural gas a day starting in 2018, according to TransCanada's plan.

Two big oil producers, BP (BP.L: Quote) and ConocoPhillips (COP.N: Quote), are pushing a competing natural gas pipeline plan. But the license to TransCanada would ensure that the state would not negotiate with any other developer.

The bill, passed by the legislature in a special session, goes into effect in 90 days, after which state officials will have the power to officially award the license.

Palin called the bill a milestone in Alaska's decades-long effort to secure a pipeline to deliver the North Slope's known 35 trillion cubic feet of natural gas to markets.

"It's a huge step forward on the new road of making that Alaska gas pipeline a reality," the Republican governor said before signing the bill at the Alaska AFL-CIO's biannual conference.

TransCanada proposes to build a 1,715-mile line from Prudhoe Bay to an existing pipeline hub in Canada.

The company's bid was the only one of five proposals submitted last year that met all the terms of the Alaska Gasline Inducement Act, which established state mandates for a natural gas project.   Continued...