Yukon Pacific Corp. has signed a memorandum of intent to sell Korea Gas Corp. 2 million tons/year of liquefied Alaskan North Slope gas beginning in 1997.
Last November the U.S. Department of Energy approved Yukon Pacific's proposal to export the gas to Pacific Rim nations. On Mar. 8 DOE affirmed that decision when it denied a rehearing request by Alaskan Northwest Natural Gas Transportation Co. and Foothills Pipe Lines (Yukon) Ltd. They are sponsors of the Alaskan Natural Gas Transportation System (Angts) project to move Alaskan gas to the Lower 48 states.
DOE ruled, "Alaskan Northwest and Foothills present no information that would merit reconsideration of our findings." It found the Lower 48 will not need the North Slope gas during Yukon Pacific's 25 year project, and the project does not conflict with U.S.-Canadian agreements facilitating Angts.
It said legislation permitting Angts "was intended to expedite development of North Slope natural gas, not to lock up this vast energy resource" and "did not guarantee financing or block competition for development of North Slope gas."
Sponsors have built the southern third of the Angts pipeline system but not a trunk line to move gas from the North Slope to Alberta.
Yukon Pacific's $11 billion Trans-Alaska Gas System (TAGS) project includes a chilled 800 mile pipeline paralleling the trans-Alaska crude oil line from the North Slope to Alaska's southern coast, a terminal and liquefaction plant at Anderson Bay, and LNG tankers. Completion target is 1996.
Alaska and the Interior Department have granted rights-of-way for the pipeline, and a final environmental impact statement has been prepared.
William McHugh, Yukon Pacific president and CEO, said, "The leadership position taken by South Korea provides the TAGS project with the momentum we need to move forward in conducting negotiations with other market countries.
"South Korea is the second largest market we targeted. The memorandum is a tremendous endorsement of our proposal. We are working to obtain similar expressions from Japan and Taiwan."
McHugh said the project will provide the U.S. with an estimated $80 billion in trade revenues during 25 years.
He said, "Far East demand for LNG is expected to increase more than 60% by 2000. TAGS is one of the few projects in the world able to satisfy such a large demand and the only U.S. project capable of achieving such dramatic reductions in our trade deficit."
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