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Alaska governor mulls TransCanada gas pipeline bid

28/03/08

ANCHORAGE, Alaska (Reuters) - Alaska Gov. Sarah Palin said on Friday her administration would decide in two months whether to support TransCanada Corp.'s proposal for shipping natural gas from the North Slope to domestic markets.

The administration will present its findings on the company's application for a state license to build the massive new pipeline during the week of May 19, the governor said, giving lawmakers time to review them before they convene in special session June 3.

The North Slope holds about 35 trillion cubic feet of proven natural gas, most of that within the Prudhoe Bay oil field, and is believed to hold potential for much more. But there has been no method to ship the natural gas to any markets, so it has languished on the North Slope.

TransCanada's proposal was the only plan of five that met all the requirements of the government's Alaska Gasline Inducement Act launched last year, the latest in a series of efforts over the past three decades to get the state's natural gas to a major market.

ConocoPhillips submitted a separate proposal outside the state's AGIA process, which Palin's administration said fell "critically short of meeting the state's objectives."

Since TransCanada submitted its bid, some critics have questioned the company's wherewithal to sponsor such an expensive project, which TransCanada estimates will cost $26 billion, as well as the company's expressed hope for new federal assistance to limit financial risks.

"The gasline team faces a truly monumental effort in comprehensively analyzing TransCanada's application, considering the public comments received and reviewing the all-Alaska LNG options for comparison purposes," Palin said in a prepared statement.

(Reporting by Yereth Rosen; editing by Jim Marshall)

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