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TransCanada Corp.'s (TRP) bid to build the Alaska Highway pipeline project got a boost on Friday when the state of Alaska announced that TransCanada's application would proceed to the evaluation stage.

The TransCanada bid, according to Alaska governor Sarah Palin, was the only application of the five submitted for review under the Alaska Gasline Inducement Act [AGIA] that satisfied all of the mandatory requirements. ConocoPhilips' (COP) application, which was submitted outside of the AGIA process, will also still be considered.

"The announcement is a positive, given that the project represents a capital deployment opportunity on the order of $26-billion," Desjardins analyst Daniel Steyn said in a note to clients.

Mr. Steyn raised his price target on the stock from C$45 to C$45.50 based on a slightly lower risk premium in the company's discounted cash flow valuation, but noted "the project remains subject to many risks along the way, and would not see the light of day prior to 2018." His "buy" rating remains unchanged.

RBC analyst Robert Kwan, meanwhile, maintained his "outperform" rating and C$42 price target for TransCanada stock, telling clients that the ultimate benefit to TransCanada is tying Alaskan gas into its existing systems.

"As the dominant operator of pipelines leaving Alberta, the key for TransCanada is to tie additional volumes (i.e. northern gas) into its existing pipeline systems to enhance long-term throughput," the analyst wrote.

Source: TransCanada's Alaska Highway Bid Moves to Next Level