After completing preliminary environmental assessment work on a staff-to-staff basis with federal regulators, Mitsubishi Corp.’s California-based liquefied natural gas (LNG) development company, Sound Energy Solutions (SES), is set to file a formal application later this month with the Federal Energy Regulatory Commission. A City of Long Beach Energy Department official confirmed that the port city is still backing the proposal, assuming it can meet all safety and environmental standards.

The filing — which is joint to FERC and to the Port of Long Beach — will be made before the end of the month, said Tom Giles, SES’s executive vice president and COO.

The proposed site that would handle the equivalent of 700 MMcf/d to 1 Bcf/d of LNG is located on part of a closed U.S. Naval Base in Long Beach Harbor, which combined with adjacent Los Angeles Harbor constitutes the busiest port in the United States and third busiest in the world.

While SES is also talking to potential suppliers upstream and potential buyers downstream, it has nothing to “really to talk about yet,” according to Giles during a brief interview Wednesday with NGI.

SES holds a potential lease on the port site with tentative plans to build a pier for receiving LNG from ocean-going tanker-ships and storing and regasifying the LNG. Part of the shipments will be sold in its liquid state for use in Southern California’s burgeoning use of LNG as a fleet transportation fuel.

One of the carrots used by SES in winning over community and business groups in the immediate harbor area is the prospect for transforming many of the current diesel-powered vehicles and equipment in the port to run on LNG, carrying the prospect of lessening air emissions in the heavily industrialized area.

“Mitsubishi has a long history as an importer of LNG in Japan, and as such, it has relationships with various suppliers,”said Giles, who noted that “a lot of” other state and local agencies will also have to sign off on some aspect of the project. It is one of several proposed for the California coast, in addition to the four or five active proposals for siting LNG receiving terminals on the Pacific coast of North Baja California in Mexico.

San Diego-based Sempra Energy is one of those Baja LNG proponents, and its major Los Angeles-based utility company, Southern California Gas Co., could be one of the biggest potential purchasers of LNG through the Long Beach facility. “We’re talking to all the people in the LA Basin that buy (large quantities of) natural gas.”

At this point, SES is striving to complete its FERC and local/state permitting by the end of the year to allow construction to begin next year, with operations beginning in the first quarter of 2006. There is no organized opposition to the project, Giles said, and LNG as a vehicle fuel is being embraced.

“Cleaning up the air — beginning with diesel emissions — is very important in the local community,” Giles said. “It is a major issue in the area.”

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