Having lost its joint venture partner, ConocoPhillips, and seeing no softening of the local government officials' resistance, Mitsubishi's Sound Energy Solutions (SES) is hoping a California Superior Court in Los Angeles will eventually put its plans back on track for a proposed liquefied natural gas (LNG) terminal in the Port of Long Beach. A court hearing Friday was set to outline the schedule for the case in the first quarter next year.

SES CEO Tom Giles told NGI last Wednesday that his company will prevail in court and the Harbor Commission for the Long Beach port will be forced to complete the environmental review of the project and make a joint finding with the Federal Energy Regulatory Commission staff. The port abandoned the environmental review just as it was finishing up early this year.

Since the court filing early this year, Mitsubishi parted company with its joint venture partners at ConocoPhillips, but the change has stayed under the radar and nothing pertaining to the breakup is posted on either firms' websites. Giles and a Houston-based ConocoPhillips spokesperson confirmed the breakup without giving much detail.

In a tersely prepared reaction dating back to June, ConocoPhillips said it had decided "not to extend the two-year agreement it had with Mitsubishi for 50% ownership of SES because the company has decided to focus on other opportunities." Giles indicated Wednesday that ConocoPhillips wanted to concentrate on its global LNG interests, particularly the ones in Qatar.

The ConocoPhillips spokesperson also read a news release that SES had published June 8: "SES has changed its ownership structure from 50% Mitsubishi and 50% ConocoPhillips to 100% Mitsubishi Corp. The ownership change is effective as of June 8, 2007.

"Sound Energy Solutions is [still] seeking to construct and operate a LNG terminal at the Port of Long Beach that would receive LNG from ships and distribute both natural gas and LNG for local vehicular consumption."

In mid-October Giles told NGI he thought a favorable court ruling would force the draft environmental impact statement and environmental impact report to be completed, and that in turn would allow SES to get the go-ahead eventually to begin building its proposed $800 million, 1 Bcf/d receiving terminal. He did not mention that ConocoPhillips had dropped out of the project earlier in the year.

Giles continues to vehemently argue that the Harbor Commission "wrongly curtailed an established environmental process" that is supposed to objectively and comprehensively evaluate the project, providing the facts to government agencies and the public so they can make "an informed decision."

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