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Long Beach LNG Terminal Plans Abandoned

Going from moribund to dead, a proposed 1 Bcf/d liquefied natural gas (LNG) terminal in Long Beach Harbor along the Southern California coast was officially dropped Friday with the sponsor Mitsubishi Corp. notifying FERC. It had been barely breathing since a California Superior Court judge in Los Angeles refused to force the port to complete a final environmental assessment of the proposal (see NGI, June 2).

Mitsubishi's Sound Energy Solutions (SES) CEO Tom Giles, who's company was the proponent of the five-year effort to site the first LNG receiving facility on the U.S. West Coast, said last month that the Japanese-based parent company would decide by Friday whether to pursue a court appeal.

Given the court's rejections and the Long Beach port and city's unwillingness to push forward with the project, Mitsubishi told the Federal Energy Regulatory Commission (FERC) it had no other choice.

Giles confirmed last month that there was little or no activity on the once promising project, and most of the SES employees already had gone elsewhere,

On March 18 a California Superior Court judge in Los Angeles denied SES's request to compel the Port of Long Beach to complete its environmental impact report (EIR), which it terminated abruptly in early 2007. At the time Giles said SES was not giving up.

Giles, a former Houston-based energy attorney, said he was unsure what Mitsubishi's other LNG plans for North America might be. "In one of the Gulf Coast projects a couple of years ago they decided to ship some cargoes as part of the capacity for that terminal, but they are not owners in that project.

"However, they are in the LNG business, so they are always looking at what is going on in the industry," said Giles, referring to Mitsubishi's ownership of gas production, tankers and LNG terminal technology and equipment.

Earlier this year Giles told NGI that Mitsubishi had spent about $80 million on the Long Beach project, which was more than a year into the development of a joint final environmental assessment by the Federal Energy Regulatory Commission staff and the Port of Long Beach when the port stopped the process in January 2007.

As the earliest of nearly a half-dozen LNG terminal proposals for Southern California that have emerged in the past five years, SES sought a 25-year site lease with the port to build an $800 million, 1 Bcf/d facility that would regasify most of its shipments but distribute some LNG locally for use in transportation and running port equipment in the harbor. By the end of 2006 the City of Long Beach political leaders, including Mayor Bob Foster, a former president of Southern California Edison Co., turned against the project.

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