Application For Export Authorization Of Liquefied Natural Gas By Yukon Pacific Corporation.pdf

# Application for Export Authorization of Liquefied Natural Gas by Yukon Pacific Corporation

## Introduction

Yukon Pacific Corporation (YPC) submits this application to the Department of Energy's Economic Regulatory Administration (ERA) seeking authorization to export up to fourteen million metric tons annually of liquefied natural gas (LNG) from Port Valdez, Alaska, to selected Pacific Rim countries. The proposed exports are intended to meet the growing demand for LNG in these regions and to diversify U.S. energy markets.

## About Yukon Pacific Corporation

YPC is an investor-owned corporation established under the laws of Alaska with its headquarters in Anchorage. Its primary purpose is to construct, operate, and maintain the Trans-Alaska Gas System (TAGS) and market North Slope natural gas to international markets. Currently, there are no facilities in Alaska capable of transporting and exporting LNG.

## Communication Contact

All communications related to this application should be directed to:

Robert W. Perdue, Esquire
Patrick C. Rock, Esquire
Reynolds Shannon Miller Blinn White & Cook
1667 K Street, N.W., Suite 300
Washington, DC 20006
(202) 293-1717

Jeffrey B. Lowenfels, Esquire
General Counsel
Yukon Pacific Corporation
P.O. Box 101700
Anchorage, Alaska 99501
(907) 279-1596

## The Project

The project involves the construction and operation of an LNG export terminal at Port Valdez, Alaska, with a capacity to handle up to 4.5 million metric tons annually. YPC proposes to export LNG to Japan, the Republic of Korea (ROK), and the Republic of China (Taiwan) for a period of twenty-five years.

## Project Feasibility

The project is technically feasible due to the availability of abundant natural gas resources on Alaska's North Slope and the existing TAGS infrastructure. Financial feasibility is supported by market studies indicating strong demand for LNG in the proposed export countries, particularly Japan and ROK.

## Export Sources

YPC has identified several potential sources of natural gas for the project:
- North Slope reserves held by various federal and private entities.
- Potential future production from new discoveries in the Alaska offshore.
- Gas from existing TAGS producers not committed to domestic markets.

## Export Markets

### Japan
Japan's energy security is heavily reliant on imported LNG, making it a prime target for YPC's exports. The country's demand for natural gas is expected to grow significantly over the next decade.

### Republic of Korea (ROK)
The ROK has experienced rapid economic growth and increasing energy demands. It imports most of its natural gas, creating a favorable market for YPC's LNG supplies.

### Republic of China (Taiwan)
Taiwan also relies heavily on imported energy sources, particularly LNG, to meet its growing industrial needs. The project offers an opportunity to supply this important market.

## Contract Terms

YPC proposes the following contract terms:
- Price: Market-based rates linked to international LNG prices.
- Term: Twenty-five years with options for renewal.
- Volume: Up to fourteen million metric tons annually, divided among the three countries based on their respective demand levels.
- Payment Terms: Monthly or quarterly payments, depending on the buyer's preference.

## Public Interest Considerations

### National and Regional Need for North Slope Natural Gas
The export of LNG from Alaska's North Slope addresses a critical national energy need by diversifying domestic and international markets. It also benefits regional economies, particularly in Alaska, by creating new employment opportunities and generating revenue.

### Reduction in the U.S. Trade Deficit
LNG exports can contribute to reducing the U.S. trade deficit by increasing exports of American energy resources.

### Benefits to U.S. Foreign Relations
This project has the potential to strengthen diplomatic relations with key allies, particularly Japan and ROK, by providing them with a reliable source of natural gas.

### Benefits to the State of Alaska
Alaska stands to gain economically from LNG exports, including increased government revenues through taxes and royalties, as well as job creation in construction, operation, and related industries.

## Environmental Impact

The project's environmental impact is expected to be minimal due to the existing infrastructure and the remote location of Port Valdez. YPC will implement measures to protect marine life and minimize any potential ecological effects.

## Related Authorizations

YPC has obtained or applied for various permits and approvals, including those required under the National Environmental Policy Act (NEPA) and other relevant federal and state regulations.

## Need for Expedited Action

Given the growing demand for LNG in the proposed export countries and the significant benefits to both domestic and international energy markets, expedited action is warranted.

## Conclusion

In summary, Yukon Pacific Corporation's application for authority to export LNG from Alaska presents a compelling case for diversifying U.S. energy exports and meeting the energy needs of key allies in the Pacific Rim. The project is technically and financially feasible, with strong public interest considerations and minimal environmental impacts.