(JUNEAU) - Construction of a natural gas pipeline from Alaska's North Slope moved one step closer to becoming a reality today as Governor Frank Murkowski signed House Bill 267 in a ceremony held in Wasilla.

The bill, sponsored by Rep. Vic Kohring, (R-Wasilla/Mat-Su) authorizes the Alaska Railroad to issue up to $17 billion in tax-exempt bonds for the financing of building a pipeline.

"This is a tremendous project for the future of Alaska and this bill is seen as a key step in getting a line built and natural gas on its way to market," said Kohring, Chairman of the House Special Committee on Oil and Gas.

While Alaska Railroad would issue the bonds, neither Alaska Railroad nor the State would be liable for the debt. The bill requires that prior to issuing bonds, Alaska Railroad must determine that any contract or lease is sufficient to pay back the bonds as scheduled, maintain reserves for the payments, and pay all costs necessary to secure the bonds.

"With the recent passage of the Stranded Gas Act and HB 267, coupled with federal action to streamline permitting and regulations, construction of a pipeline is now that much closer to fruition," Kohring said.

House Bill 267 allows Alaska Railroad to provide financing for the acquisition, construction, improvement, maintenance, and equipping and operation of the facilities for the transportation of natural gas resources in and out of the state.

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