UPDATE 1-US, Alaska mull pipeline options if Big Oil balks

(Adds comments. In U.S. dollars)

By Jeffrey Jones

CALGARY, Alberta, March 6 (Reuters) - The U.S. government and Alaska are weighing options for getting a massive natural gas pipeline started should gas producers turn their backs on TransCanada Corp's (TRP.TO: Quote, Profile, Research, Stock Buzz) $26 billion proposal, officials said on Thursday.

Alaska Governor Sarah Palin has threatened to revoke leases for oil fields such as Prudhoe Bay if BP Plc (BP.L: Quote, Profile, Research, Stock Buzz), Exxon Mobil Corp (XOM.N: Quote, Profile, Research, Stock Buzz) and ConocoPhillips (COP.N: Quote, Profile, Research, Stock Buzz) refuse to participate in her process for putting forward a pipeline that maximizes benefits to the state.

The producers have said they are leery of co-operating with Canada's biggest pipeline firm on its plan, the only one to win favored status under Palin's Alaska Gasline Inducement Act, leaving the risk that it could have no committed gas supply.

However, Hal Kvisle, TransCanada's chief executive, said he doesn't expect the North Slope producers to agree to ship on the line until the Alaska government firms up its royalty expectations for the gas, and the planning for the line advances.

The producers "are not going to display any enthusiasm until all the pieces of the puzzle are put together," Kvisle told reporters after a speech to an Arctic gas conference in Calgary.

Drue Pearce, federal co-ordinator for Alaska Natural Gas Transportation Projects, said Congress is keen after decades of delay on tapping the 35 trillion cubic feet of North Slope gas reserves to meet fast-growing U.S. demand.

"(Lawmakers have) said: 'Alaska, you need to move because, if we have to, eventually, Congress will step in and make sure this pipeline gets built'," Pearce said after a speech to the conference.