Alaska paid $64.6 million to buy TransCanada Corp.'s stake in a proposed project to ship natural gas by pipeline from the state's North Slope to an export terminal on the coast.

The move, which was authorized by legislation passed by the state earlier this month, gives Alaska direct ownership in the project, along with partners BP PLC, ConocoPhillips and Exxon Mobil Corp. It comes at a time when the outlook for demand for liquefied natural gas is uncertain amid a supply glut that has depressed once lofty spot market prices for the fuel.

"By gaining an equal seat at the negotiating table, we are taking control of our destiny and making significant progress in our effort to deliver Alaska gas to the global market," Alaska Gov. Bill Walker said in a statement Tuesday.

The project, known as Alaska LNG, would transport natural gas from the North Slope fields, then liquefy the fuel at the facility on Cook Inlet for shipment to markets in Asia. The project is expected to cost between $45 billion and $65 billion.

Alaska LNG has yet to be approved for construction and wouldn't start commercial shipments before 2023, according to filings by its corporate backers.

In ceding its 25% stake, TransCanada said it would no longer participate as an owner or potential operator. "We will not be involved in any way," said company spokesman Mark Cooper.

Without TransCanada, it is unclear who will build and operate the project's 800-mile-long pipeline.

TransCanada has been a proponent of an Alaskan natural gas pipeline project dating back to at least 2007, and its corporate website still includes Alaska LNG on its North American "asset map."

Alaska LNG aims to produce as much as 20 million tons of LNG a year, dwarfing the 1.2 million-ton capacity of Alaska's only operating LNG facility, which was built in 1969 and is operated by ConocoPhillips.

Write to Chester Dawson at chester.dawson@wsj.com

 

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(END) Dow Jones Newswires

November 25, 2015 01:25 ET (06:25 GMT)

Copyright (c) 2015 Dow Jones & Company, Inc.
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