this solution reads the whole text file and creates two lists (name- and pathList).
An numeric index prefix is added to the name list for a fast lookup to get the appropriate path
set textFile to (choose file)
set textFileContents to paragraphs of (read textFile)
set nameList to {}
set pathList to {}
repeat with i from 1 to (count textFileContents) by 2
set end of nameList to ((i div 2 + 1) as text) & " - " & item i of textFileContents
set end of pathList to item (i + 1) of textFileContents
end repeat
set chosenName to choose from list nameList
if chosenName is false then return
set folderPath to item (word 1 of item 1 of chosenName) of pathList
tell application "Finder" to open folder folderPath
Note: The Finder expects HFS paths (colon separated)