The Port of Long Beach, CA’s Harbor Commission Tuesday gave initial approval to a subsidiary of Japanese-based Mitsubishi Corp., to pursue developing a liquefied natural gas (LNG) receiving terminal on a 27-acre site on part of an abandoned U.S. Naval Base in the harbor, which combined with adjacent Los Angeles Harbor comprises the nation’s busiest port. Long Beach’s municipal utility may be one of the buyers of the gas.

Long Beach’s harbor panel approved a letter of interest with Sound Energy Solutions, a Mitsubishi subsidiary, for a $400 million project that eventually could handle as much as 10% of the state’s natural gas supplies. The proposal at this stage is being welcomed by Long Beach city officials and the city’s harbor administration. The city owned energy department that operates a municipal gas utility announced it will buy a portion of the supplies that most likely would come from the Far East or Australia (see Power Market Today, May 2, 2003).

The Long Beach Energy Department could eventually take all of its 13 Bcf annual load from the LNG importer, said Chris Garner, director of the city department that runs a water utility and buys electricity for city facilities, in addition to operating its gas distribution utility. For now, Garner said the city is very supportive, but he cautioned that there are still many stages for the proposal to successfully complete, including gaining broad-based community support for the project.

A Southern California-based spokesperson for Mitsubishi said the next steps would unfold simultaneously, although a formal filing with the Federal Energy Regulatory Commission is probably still a number of months away. Those steps would include: “fearless engineering work” on the site plans, environmental impact assessment, a harbor-specific transportation plan for using part of the LNG to replace diesel-powered vehicles and equipment operating in the port, and informal submittals of the early work for review by FERC staff.

There will also be a stepped up “community outreach” effort as Mitsubishi did last year in the LA Harbor area when a potential site there was being considered, the spokesperson said. A major local attraction to the facility siting is projected port revenues of $3.7 million annually based on a projected 68.3 million barrels of LNG being processed annually, according to a port spokesperson quoted in Wednesday’s Los Angeles Times.

Currently there are up to a half-dozen proposed coastal LNG receiving terminal sites in the West with three or four in North Baja’s Pacific Coast in Mexico. The Mexican government earlier this month approved a proposal by Marathon for a combination LNG receiving terminal, gas-fired electric generation plant and desalination plant in North Baja, and San Diego-based Sempra Energy and several others are awaiting action by the same Mexican federal energy commission. There are also at least two other conceptual proposals for both on- and off-shore LNG receiving terminal farther norther along the California coast.

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