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NEWS BULLETIN

January 28, 2004 --- Vol. 10, No. 10January 2004

Alaska Gasline Port Authority signs MOU for LNG to California

The Alaska Gasline Port Authority said today that it has signed a memorandum of understanding to negotiate a detailed letter of intent to supply liquefied natural gas from Alaska to California.

The municipal port authority was formed in 1999 by the Fairbanks North Star Borough, the North Slope Borough and the City of Valdez to move Alaska North Slope gas as LNG.

The authority said it has signed a memorandum of understanding with Crystal Energy LLC “to negotiate a detailed letter of intent to supply LNG from Alaska to Crystal Energy’s Clearwater Port LNG receiving terminal in California.” The Alaska Gasline Port Authority would supply up to 800 million cubic feet per day of natural gas for a 20 year period.

The Clearwater Port project proposes to use the existing Platform Grace, some 11 miles offshore Ventura County in California, where LNG would be converted back into vapor form and delivered to existing Southern California Gas Co. transmission system via pipeline.

The Alaska Gasline Port Authority obtained a tax-exempt IRS ruling in January 2000, and proposes to distribute net revenues to the state of Alaska and to each community in Alaska on a per-capita basis.

The Port Authority said that the announcement by MidAmerican Energy Holdings that it intends to build a gas pipeline from the North Slope to the Canadian border, “would greatly simplify the Port Authority’s LNG project,” because its gas pipeline would not need to be built from Alaska’s North Slope, but could begin in Delta Junction and run only 250 miles to a proposed LNG terminal in Valdez, also creating an opportunity for a spur line to the Southcentral gas grid.

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