Yukon Pacific Co. LP last week asked FERC for a three-year extension in which to begin construction of its proposed liquefied natural gas (LNG) export project in Alaska. This was the company’s third request to push back the construction start-up date.

“A further extension is needed to secure market and capital commitments necessary for construction to commence,” Yukon Pacific, a unit of CSX Corp., told the Federal Energy Regulatory Commission. Without it, the company said the LNG export project would be undermined, and more than $100 million in investment would be stranded.

In its latest plea, which was filed on Tuesday, Yukon Pacific requested that FERC give it until May 2007 to start construction. The agency previously had set May 2004 as the deadline.

The so-called Trans-Alaska Gas System (TAGS) project, which the Commission approved in 1995, calls for the siting and construction of liquefaction and associated facilities at Anderson Bay, Port Valdez in Alaska for the purpose of exporting LNG to Japan, the Republic of Korea and Taiwan. The proposed facilities would liquefy gas that is received over a proposed intrastate pipeline originating on Alaska’s North Slope [CP88-105].

Yukon Pacific said that absent the extension, it could be forced to abandon this “large and complex” project. “Yukon Pacific’s site approval must remain viable for the project to remain viable. If the approval lapses, there will be a great risk that Asian markets will turn to other foreign supply sources,” the company said.

Despite the progress it has made, Yukon Pacific reported it “recently suspended its major project development activities” related to the proposed TAGS facilities. “As the Commission is well aware, there is heightening interest in LNG both globally and domestically, and in getting North Slope gas to Lower-48 consumers. However, those interests have yet to create market conditions necessary for the TAGS project to proceed. Until such conditions exist, Yukon Pacific is maintaining its readiness to serve previously targeted and possibly new markets, and to protect the substantial investments the company…has made to date, including investments made in its permits.”

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