Alaska Gov. Sean Parnell suggested Thursday that the state's oil and natural gas producers should ship Alaska's natural gas overseas rather than to the U.S.

Gov. Sean Parnell said that Japan and other Asian countries may be a "better market for Alaska gas" and that he has suggested to TransCanada Corp. (TRP) and the state's large oil producers that they focus on building a natural gas export terminal, rather than a long-distance pipeline to the contiguous U.S.

"If market demand for gas has truly shifted away from the Lower 48 [states] to Pacific Rim markets, then the state of Alaska must also be willing to move with that, and we are," Parnell said, speaking at an event in Anchorage held by the Alaska Oil and Gas Association that was webcast.

In addition to TransCanada, Parnell said he has spoken about building a natural gas export terminal to representatives of Exxon Mobil Corp. (XOM), BP PLC (BP.LN, BP) and ConocoPhillips (COP).

Parnell's comments come as U.S. and Canadian natural gas companies reposition themselves to export gas from North America to fast-growing markets in Asia and Europe, rather than import gas, as U.S. gas prices have plunged due to ample supply and slow-growing U.S. demand.

In one of the first North American gas export deals, Cheniere Energy Inc. (LNG) signed an $8 billion agreement Wednesday with U.K.-based BG Group PLC (BG.LN) to sell liquefied natural gas from a facility in Louisiana. In May, Cheniere obtained a key federal approval it needs to expand the Louisiana terminal, currently used for importing gas, to include a facility that could export up to 2 billion cubic feet of gas a day.

Parnell said the current boom in natural gas production from shale-rock formations in the U.S. and Japan's shift away from nuclear power, toward gas-fired electricity generation, following the March earthquake and tsunami that triggered a nuclear crisis there, as major factors that have shifted the natural gas market from the U.S. overseas.

TransCanada and Exxon have proposed building a $41 billion, 1,700-mile pipeline from Prudhoe Bay on Alaska's North Slope to Alberta, Canada, that would connect with TransCanada's existing pipeline system that carries gas into the U.S. The pipeline would ship up to 4.5 billion cubic feet a day of gas and could be expanded to carry 5.9 bcf a day.

TransCanada declined to comment specifically on Parnell's proposal to switch the pipeline project to an export terminal, but the company said it was having "regular conversations" with the state.

"TransCanada is continuing its efforts to advance the Alaska pipeline project to successfully transport North Slope gas to market," the company said in a statement.

While the pipeline has received most of the attention, the companies also have proposed an alternative plan to build an 800-mile pipeline to ship gas from the North Slope to southern Alaska, where it would be liquefied for transport to Asia and other foreign markets.

BP and ConocoPhillips had formed a rival joint venture, called Denali, that had proposed building a $35 billion, 1,700-mile pipeline from the North Slope to Alberta, but the companies scrapped that plan last May.

TransCanada has a license and financial backing from the state of Alaska, obtained during former Gov. Sarah Palin's administration. The license includes a 10-year guarantee that locks in tax rates for producers. Producers have complained about the 10-year term, saying it is too short, in part because it doesn't match up with a pipeline commitment, which would likely be 20 years or longer.

Denali's project didn't have state backing.

-By Cassandra Sweet, Dow Jones Newswires; 415-439-6468; cassandra.sweet@dowjones.com

--Ed Welsch in Calgary contributed to this article

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