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Gas line player Yukon Pacific winds down Company surrenders federal right-of-way grant for its LNG project; despite $100M investment, construction never started Wesley Loy For Petroleum News
A longtime contender for construction of an Alaska natural gas pipeline is bowing out of the game.
Yukon Pacific Corp., in correspondence with federal officials, said its Trans-Alaska Gas System project, or TAGS, “has officially come to a close,” and the company is in the process of dissolution and winding down its business affairs.
Efforts related to TAGS “reflect an investment in Alaska of more than $100 million with no return,” said a June 2 letter from an Anchorage law firm representing Yukon Pacific.
The letter was in support of the company’s request to surrender its federal right-of-way grant for the TAGS project, construction of which never got under way.
The U.S. Bureau of Land Management on Oct. 26 issued a decision honoring Yukon Pacific’s request and terminating the right-of-way grant.
Yukon Pacific had held the grant since 1992, and was incurring expenses such as annual rent in keeping it.
Company’s rise and fall Yukon Pacific, whose major owner is transportation giant CSX Corp., was incorporated in Alaska in 1983. For many years, Wally Hickel, the late governor of Alaska, was involved with the company.
The company’s aim was to build an 800-mile pipeline to carry the huge North Slope gas reserves to the city of Valdez for liquefaction and shipment aboard tankers to Asia.
But the enormous cost of building a gas line across Alaska frustrated Yukon Pacific’s efforts.
The company suffered serious setbacks in recent years.
In 2008, the Alaska Department of Natural Resources took away the company’s conditional pipeline right of way across state lands. The department held that Yukon Pacific had not shown enough progress for a renewal.
In April 2010, Yukon Pacific asked the Federal Energy Regulatory Commission for a three-year extension of the deadline to commence construction of its liquefied natural gas export terminal at Anderson Bay near Valdez. FERC’s Office of Energy Projects denied the extension, saying a 1995 environmental impact statement for the project was outdated.
Yukon Pacific cleared out of its office space in downtown Anchorage in 2003.
Even with Yukon Pacific’s departure, the idea of shipping LNG overseas is still part of Alaska’s ongoing gas line discussion.
Indeed, on Oct. 27, Gov. Sean Parnell suggested energy companies come together on an LNG project, as efforts to build a pipeline to the Lower 48 seem to have stalled.
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