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Long Beach, CA, City Council Moves Up LNG Vote

June 6, 2005
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Three city council members already opposed to siting a liquefied natural gas (LNG) receiving terminal in their harbor said Friday they will push the Long Beach, CA, City Council to vote this Tuesday on the city's potential contract for supplies from the proposed Mitsubishi-ConocoPhillips terminal in the Port of Long Beach. The city officials' vote is separate from ongoing permit work being done jointly between the Port and FERC.

Late last month, the city council postponed a scheduled vote on the issue, which subsequently riled organized opponents of the proposed receiving terminal, which would deliver up to 1 Bcf/d of regasified LNG (see NGI, May 26).

While the city has no direct vote on the proposed terminal, which has been the subject of a jurisdictional fight between the Federal Energy Regulatory Commission and the California Public Utilities Commission, the vote is viewed by local officials and residents as a referendum of sorts for the project, originally proposed three years ago by Mitsubishi subsidiary Sound Energy Solutions (SES) which was later joined by ConocoPhillips.

The Long Beach Harbor Commissioners -- not the city council -- have the power to terminate the project, according to a report in Friday's Los Angeles Times. Thus, the council members opposed to the plant are focused on a May 2003 letter of intent between the city and SES.

At stake is the city-SES agreement to negotiate a possible supply contract with the LNG terminal operators. This is separate from the ultimate question of whether the proponents will get a permit from the Port and FERC to allow construction to begin. However, the city talks with SES do involve added energy infrastructure, including a 2.5-mile natural gas transmission pipeline to bring supplies into Long Beach's municipal natural gas network.

A May 25 meeting of city officials, including the city attorney's office, prior to a regularly scheduled late afternoon council meeting prompted the council to delay its vote until its June 21 meeting. Now the three dissident council members want to force a vote this Tuesday (June 7) on a resolution that reads: "...to authorize the city manager to terminate negotiations with SES/Mitsubishi regarding a long-term natural gas supply and the feasibility of constructing and operating interconnecting natural gas pipelines to the proposed LNG facility, pursuant to a memorandum of understanding approved by the city council May 13, 2003."

SES's spokesperson continued to caution against a "rush to judgment" by the city council in a quote in the Times' article, which also quoted the Long Beach City Attorney Robert Shannon as confirming that a city council vote on the city-SES negotiations would have no legal impact on the Port of Long Beach's ability to negotiate with the LNG terminal developers.

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