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TAGS lease renewed
Kristen Nelson
Yukon Pacific Corp.’s conditional state right-of-way lease for the trans-Alaska gas system was renewed for 10 years at a signing ceremony Dec. 11.
Yukon Pacific, a subsidiary of CSX Corp., holds permits for an Alaska LNG project bringing North Slope natural gas to Valdez and liquefying it there for shipment to the Far East and separate authorizations from the President of the United States and the U.S. Department of Energy to market Alaska-produced LNG to Asian buyers.
Yukon Pacific President Jeff Lowenfels told PNA Dec. 14 that the state right-of-way was the only one of the company’s permits that needed to be renewed.
Yukon Pacific is also a member of the Alaska North Slope LNG Project, a consortium of companies formed earlier this year to work on a liquefied natural gas project to deliver Alaska North Slope gas as LNG to markets in the Far East.
Yukon Pacific is continuing to maintain its permits, some of which require ongoing monitoring “so these permits are available for the group to use, should the group make the decision that they’re useable.” Downturn in Asia Lowenfels said that the economic downturn in Asia can only help an Alaska project. “This project,” he said, “faces stiff competition from projects that are ready and while they’re treading water, we’re jumping in the swimming pool and getting in front of them. If we do it the right way.”
Wayne Lewis, Yukon Pacific vice president, said the investment climates in countries like Indonesia and Russia are also hurting projects. The Alaska project still has to be the most competitive project out there, he said, “and we will be.”
As for current low oil prices, Lowenfels said that looking at the timeline for this project in the middle of the next decade, “if the price of oil hasn’t come back, we’ll have a lot more serious things than not having an LNG project going.” Spot markets for LNG Asked about reports of a growing spot market in LNG — the sale of single shiploads of LNG — Lowenfels said, “sure, if you’ve got an existing market. But you can’t finance a project on spot. And nobody builds a project on spot. But even so, the spot market is not very big.” Even small plants would need a dedicated market, he said. Lewis said that spot market shipments might supply an occasional shortfall that would occur, and characterized the current spot market as a cargo at a time — maybe a cargo every three years.
“It is the spottiest of spot markets,” Lowenfels said. “And that is not what our project will be.”
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