Alaskan politicians approve TransCanada gas pipeline plan

Alaska's House of Representatives has approved a Canadian company's plan to bring natural gas from the state's North Slope to southern marketsby buildinga 2,760-kilometre pipeline.

The approval doesn't mean the pipeline will be built, but it's a step that is necessary if the huge reserves are to be developed.

The politicians endorsed the plan advanced by TransCanada Corp. of Calgary in a 24-16 vote Tuesday.

The Alaska legislature plans a reconsideration vote for Wednesday, but that's usually a formality. If approved then, the bill will go to the state Senate, which must approve or reject it before Aug. 2.

Gov. Sarah Palin also backed the proposal.

However, itwill take at least 10 years before any gas might flow, an Alaskan government report said.

TransCanada has been working on the project since 1976. Itwas shelved when gas prices fell, but revived when prices rose again. It'salso been controversial because the companies that will produce the gas, BP and ConocoPhillips, have a competing plan.

TransCanada's pipeline would run from Prudhoe Baysouth through Alaska, across the southwest corner of the Yukon and the northeast corner of British Columbia, to Alberta, where the company has existing lines to Eastern Canada and the U.S.

Alaska's commissioners of natural resources and revenue had recommended the TransCanada plan, because it only required a maximum $500 million US subsidy, while the producers had demanded billions.

TransCanada also had firmer commitments tostart the process of buildingthe line.The companyhas agreed to make a formal proposalto the U.S. regulator, the Federal Energy Regulatory Commission, by 2011. The state will pay half the costs of that proposal, up to $500 million.

Before that, however, it has to get commitments from gas producers that they will use the proposed pipeline. Companies do not start to build largepipelines, which cost billions, until they havecontracts from shippers in hand.

"TransCanada has been and continues to be focused on advancing the project when the market conditions are right and commercial agreements are in place," the company website said.

TransCanada said the company holds certificates under the Northern Pipeline Act (Canada) that will let itbuild the Canadian part of the project.

The company applied in late 2007 for a licence to build the lineunder the Alaska Gas Inducement Act .