July 23, 2008 / 7:06 AM / 10 years ago

Alaska House approves TransCanada gas pipeline

ANCHORAGE, Alaska, July 22 (Reuters) - Alaska’s House of Representatives voted late on Tuesday to allow TransCanada Corp.(TRP.TO) to build a massive pipeline to tap the vast natural gas resources of the state’s North Slope region.

The chamber voted 24-16 in the state capital of Juneau for a bill backed by Governor Sarah Palin that would grant TransCanada a state license for a 1,700-mile (2,700 km) pipeline to bring the gas to North American markets.

The Alaskan Senate is expected to pass the bill approving TransCanada’s bid by August 2.

TransCanada says the project will cost $26 billion, while consultants hired by Alaska estimate the cost at $31 billion.

Palin, a Republican, has endorsed TransCanada’s plan to build the pipeline from Prudhoe Bay to an existing hub on the Alberta-British Columbia border, shipping 4 billion cubic feet a day. She argues the company, as an independent pipeline operator, would free the state and the North Slope from the dominance of the major oil producers there -- BP (BP.L), ConocoPhillips (COP.N) and Exxon Mobil (XOM.N).

Legislators said TransCanada, the largest pipeline operator in North America, was the best choice to realize Alaska’s three-decades-long dream of commercializing the languishing North Slope natural gas.

“We have players here that have an absolutely impeccable record of getting the gas to fill their pipelines,” said Rep. Mike Kelly, a Fairbanks Republican. “TransCanada has got a proposal before us that absolutely follows the procedure that we set out in this body. It’s time to award the license.”

Rep. Harry Crawford, an Anchorage Democrat, said he was impressed with TransCanada’s enthusiastic embrace of the project in contrast with what he said was the pessimistic attitude of the major oil producers.

    “When the producers would come in, they’d talk about how big the project was, how difficult it was going to be, how hard it was to get the financing and all the reasons why it was going to be so, so hard to get this pipeline built. I never heard any enthusiasm from them,” Crawford said. “But when we heard from TransCanada, what we heard was this project is integral to their future. This project is integral to Alaska’s future. We’re in alignment, Mr. Speaker.”

    A state license would mean streamlined permitting and a state match of up to $500 million for funds TransCanada spends on preconstruction costs.

    Lawmakers who voted against the license said they had more faith in a competing proposal by BP and ConocoPhillips. That joint project, named Denali, would follow a similar route to the TransCanada plan but would require no state assistance.

    “Government interjecting itself into a market place has seen colossal failure after colossal failure after colossal failure,” said House Majority Leader Ralph Samuels, an Anchorage Republican. “Government is ill-equipped to start picking winners in the marketplace.”

    Opponents criticized what they see as a $500 million state subsidy for TransCanada. (Editing by Anthony Boadle)

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