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Alaska governor extends deadline for companies to apply to build natural gas pipeline

Alaska Governor Sarah Palin has extended by two months the deadline for applications from companies interested in building a natural gas pipeline she believes will one day ship trillions of cubic feet of reserves to market.

The deadline was pushed from Oct. 1 to Nov. 30 because more companies have begun to inquire about the project, and the state has received feedback calling for more time to prepare a complete application, said Nan Thompson, a member of Palin's energy team.

"It's going to provide an opportunity for other interested parties to put together responsive bids," Thompson said. "The application asks for a lot of detail and we wanted to give more applicants more time to do a better job."

Applications became available July 3, not long after Palin signed the Alaska Gasline Inducement Act into law.

Republican state Sen. Charlie Huggins, chairman of the Senate Resources Committee, said he hopes the extension is not buying the administration time because there's a lack of interest in the project.

"Normally this means you're not getting any or many responses under the provisions that are laid out," Huggins said. "The optimist in me says if the administration is doing this, they are doing it in the best interest of the state, so I have to assume they are doing the right thing."

Palin has said the gas line project could one day be the economic life of the state, much like oil production in the North Slope is today.

But a potential multibillion dollar pipeline also carries implications for North America's long-term energy supply and has been widely discussed by lawmakers, energy regulators and company executives throughout North America since Palin outlined her plans in March.

Since lawmakers heard testimony from oil companies and independent pipeline companies and passed the Gasline Inducement Act, Palin's administration has presented the project to other companies, including three Chinese state-controlled energy companies and Houston-based El Paso Corp., one of the largest U.S. natural gas pipeline operators.

China has been working to become a global player in the energy market but usually want to invest in a project that will produce oil or gas for its country, already the second largest consumer of oil after the United States.

Amy Myers Jaffe, associate director for Rice University's energy program, said no one should balk at a state-owned company becoming an investor, but China's companies aren't likely to place a bid unless it's permitted to export the gas to China.

"Theoretically there should not be any problem with investors coming in to bring capital that is otherwise unavailable," she said. "But I don't see this as something that could be attractive to China."

Oil and independent pipeline companies that submit an application must outline details such as the pipeline's route, the market it will serve and how it can build a pipeline and avoid cost overruns.

Palin has long warned that the state and the nation cannot afford to let the natural gas supplies - estimated at about 35 trillion cubic feet on the North Slope - sit untapped any longer.

The administration had stressed an urgency to move forward so work on the pipeline can begin by late summer or early fall of next year. Thompson said that schedule can still be met, even with the extension.

Alaska has struggled for decades to get a deal either with North Slope producers or independent pipeline companies to build a line that could possibly run from the North Slope through Canada and into the Midwest.

A proposed deal between former Gov. Frank Murkowski and North Slope producers BP PLC, Exxon Mobil Corp. and ConocoPhillips fell apart last year.