The proposal for an Alaska Highway pipeline is further along today than it has been for decades, says a senior official with the company proposing the project.

Tony Palmer, vice-president of Alaska development for TransCanada Corp., said this morning that last Friday's approval of the company's proposal by the state Senate represents a significant step forward for the natural gas pipeline proposal.

Palmer said if all goes well and according to schedule, the company will be in a position by 2014 to decide whether to proceed with construction.

The company schedule proposes to have gas flowing by late 2018.

A great deal of work was carried out in the 1970s advancing the Alaska Highway pipeline proposal before market conditions pushed the proposal into dormancy, the company vice-president explained.

The pipeline proposal, now estimated to cost $26 billion, was front and centre for a time earlier this decade, but again seemed to slide off to the edge of the table for a time.

With Friday's 14-5 vote of support, a new era for the Alaska Highway pipeline proposal has begun, Palmer suggested.

"I think this is a very large step forward," he said of the state's support to issue TransCanada the licence to advance its proposal. "I would say we have moved further than we have in decades."

Yukon Deputy Premier Elaine Taylor said what's clear today that hasn't been in the past is that TransCanada now has the state's support to move through to construction if the project is viable.

There is, however, a significant amount of work to be done in the Yukon, including discussions with first nation governments, other affected provincial governments and Ottawa, she said.

Taylor said the project, for instance, still has to undergo a full environmental assessment.

"I think the main emphasis is working with first nations and all our counterparts to define how we are going to achieve a project that is viable and meets the net fiscal benefits to the Yukon."

Friday's vote in the Senate followed a similar vote of support in July by the Alaskan House of Representatives.

Once Alaska Gov. Sarah Palin officially signs off on the licence, there will be a 90-day cooling off period before the licence takes effect, should any parties have second thoughts.

Palin established a new process to attract interest in a natural gas pipeline after taking office in late 2006, when she scrapped a proposal between the state's big three producers and former governor Frank Murkowski.

TransCanada submitted its proposal last November, though both BP PLC and ConocoPhillips - two of three major producers - continue to advance their own pipeline proposal.

TransCanada is proposing to build a pipeline from Alaska's North Slope to central Alberta, to tie into its existing distribution system which is linked to the Lower 48 States.

Palmer said once the licence comes into effect later this fall, the company will begin advancing preliminary engineering and environmental assessment work to refine the cost estimate, in preparation for what's known in the industry as the open season.

During the open season, expected to be sometime in mid-2010, TransCanada would actively seek commitments from producers of natural gas who want to secure capacity on the pipeline to move their product, Palmer explained.

He said following the completion of a new cost estimate and a successful open season, the company would begin working its way through the regulatory and permitting process, particularly on the U.S. side of the border.

TransCanada is looking at 2014 to be in a position to decide whether to proceed with construction.

"If the project remains viable, then we move into construction."

The licence provided by the state also comes with a commitment to provide TransCanada with up to $500 million to do the necessary engineering and regulatory work required prior to and after the open season.

Palmer said the budget for that work is $611 million, of which the company would pick up $111 million.

Most of the money, he said, will be spent in Alaska because there has already been a significant amount of work done on the Canadian side of the border by Foothills Pipe Lines Ltd., TransCanada's wholly-owned subsidiary, he explained.

Brian Love, executive director of the Yukon oil and gas branch, said today TransCanada will still need to update information gathered in the past.

The company will want to verify its wildlife research for instance, Love explained.

He expects while Palmer is indicating a bulk of the $611 million will be spent in Alaska, TransCanada will still need to spend a significant amount in the Yukon to prepare for the open season.

TransCanada, Love added, will want to have a very firm estimate of the project cost when it goes into the open season.

It needs a firm estimate to support the proposed price it will be charging potential customers to transport their gas, and that will require updating information in the Yukon, he said.