TransCanada will be awarded $500 million from the state to assist in building the pipeline.
The Senate voted 14-5 in favor of awarding the license following the House of Representatives approval last week. Gov. Sarah Palin applauded legislators following the vote for enabling her plan to bring affordable energy to Alaskans, a platform she has vehemently pushed since taking office.
The pipeline will run from a Prudhoe Bay natural gas treatment facility to Alberta, Canada.
"This is a historic day in Alaska," Palin said during a press conference following the vote. "Alaska's potential to continue providing a safe, secure and domestic source of energy is great. I am proud of the hard work that went into this process from both the gasline team and the legislature."
The TransCanada Alaska gasline will be the largest construction project in the history of North America. The gasline is estimated to ship 4.5 billion cubic feet of natural gas per day. The Alaska section of the line's route will have h six compressor stations at startup and five natural gas delivery points throughout Alaska.
Palin has claimed that building the pipeline is the best, and most affordable, way for rural communities to wean themselves from expensive diesel fuel. Even some of Alaska's energy conservation experts have said natural gas is the best "bridge fuel" while alternative energy projects are under construction.
TransCanada has constructed several natural gas pipelines and operates more than 36,000 miles of pipelines in North America.
In its application, TransCanada Alaska commits to nearly two dozen "must-haves," which Palin's administration claims will ensure "the most jobs for Alaskans, the most energy for Alaskans, and the greatest amount of revenue for the state."
Opponents of the pipeline have said the state shouldn't pay money to build a pipeline when two oil producers, British Petroleum and ConocoPhillips, said in April they were willing to combine forces and invest $600 million of their own funds to build a similar pipeline.