TOKYO (Reuters) - Alaska could pay $70 million to $100 million for TransCanada's (>> TransCanada Corporation) 25 percent stake in the midstream and upstream sectors of the proposed Alaska liquefied natural gas (LNG) project, Governor Bill Walker said on Thursday.

Walker has recommended to legislators that the U.S. state should buy the stake, adding to a similar stake in a planned liquefaction plant and giving it a quarter share of the giant 20 million tonnes per annum export project.

Developed by ExxonMobil (>> Exxon Mobil Corporation), ConocoPhillips (>> ConocoPhillips) and BP (>> BP plc), the Alaska LNG project draws on gas from Alaska's North Slope and includes an 800 mile (1,300 km) pipeline to Nikiski on the Kenai Peninsula where the gas would be liquefied for export as early as 2024, most likely to Asia.

Walker, who last December became the governor, has pushed for the project since 1999, but now says he is confident that it will go ahead.

"I've been very pleased with the interest in this project from the market. We're the closest (to Japan), shipping time seven days so that's a significant advantage."

Walker estimated the cost of the project at $45 billion to $60 billion, with plans for front-end engineering design (FEED) to start in the first quarter of 2016.

Unfinished LNG export projects around the world are struggling to be completed because the market has become hugely oversupplied over the past year as production, especially in Australia, soars just as demand slows along with economic growth.

Benchmark Asian spot LNG prices have fallen by two-thirds since last peaking in 2014, although the long-term demand outlook for natural gas is healthy as the fuel is expected to take market share from thermal coal to generate electricity.

Alaska LNG has federal approval to export up to 2.55 billion cubic feet per day of gas for 30 years, equivalent to over 3 percent of U.S.-supplies, but it still requires an environmental review and final investment decision (FiD).

To ensure the project goes through, Walker said the state was planning a provision that in case one partner quits, its share is equally distributed among the remaining stakeholders.

Walker said Alaska LNG's supplies would be priced flexibly, according to customer needs, including an option of a link to the U.S. Henry Hub gas price and a cocktail of Japan's oil prices.

(Additional reporting by Steve Quinn in Juneau; Editing by Henning Gloystein and Richard Pullin)

By Osamu Tsukimori