(April 21, 2004) -- The Mitsubishi subsidiary seeking federal authority to construct a Liquefied Natural Gas (LNG) facility in the Port of LB has "reaffirmed [its] ongoing commitment" to "work with and obtain all required state and local permits" for the project.

Tom Giles, Chief Operating Officer and Executive VP of South Energy Solutions, said in a written release:

"It is our standing that FERC jurisdiction over siting approval does not pre-empt the necessity of working with state and local authorities for a wide range of necessary permits. Whether it is an air permit from SCAQMD, an approval of a master plan amendment from the Coastal Commission, certification of an EIR and other requirements of the Port of Long Beach, or the many other government departments and agencies we have been working diligently with over the past year, SES has and will stay the course. Safety reviews conducted by the U.S. Coast Guard, the Port, the Coastal Commission, and other agencies will continue."

Mr. Giles added, "We are contacting all the applicable state and local government stakeholders to reassure them of our commitment. SES looks forward to continuing the open and transparent process afforded by state and local permitting review."

The firm proposes to build an 80 million gallon LNG receiving, storage and regassification facility and an associated 4.5 million gallon propane/butane/ethane stripping plant in the Port of LB.

The company release comes just days after an April 16 filing (previously reported by LBReport.com) in which the South Coast Air Quality Management District (SCAQMD) told FERC that the LNG facility "is expected to be a substantial source of air contaminants that contribute to the Basin’s current violations of federal health-based air quality standards for ozone, sulfur oxides, and tiny particles smaller than 10 microns."

SCAQMD's contentions, which were included in an "out of time" (i.e. late filed) motion seeking FERC permission to intervene in the federal proceeding, added that "the proposed SES project well exceeds federal major sources thresholds under the Clean Air Act, requiring SES to obtain Clean Air Act Title V permits. SCAQMD is the sole authorized permitting authority to issue such permits. Moreover, the SES project would also be required to meet SCAQMD’s air pollution control requirements, including those that are federally mandated."

In February 2004, the CA Public Utilities Commission told FERC that under CA law, it considers the project applicant a CA public utility which must obtain a certificate of public convenience and necessity from the CPUC to build and operate the proposed LNG terminal. On March 24, 2004, FERC responded with a Declaratory Order Asserting Exclusive Jurisdiction -- the legal position that had been advocated by Sound Energy Solutions. Court review is now expected to settle the state versus federal jurisdictional conflict.

The firm has previously said, and effectively reiterates in its most recent release, that it will comply with other CA and local agencies, including the CA Coastal Commission and the Port of Long Beach during various required reviews.

In addition to FERC, SES has filed a parallel application with the Port of Long Beach...and apart from whether FERC authorizes the facility, LB's Mayor-nominated, City Council-approved Board of Harbor Commissioners would also have to approve it. Harbor Commission certification of the project's Environmental Impact Report could also be appealed to the elected City Council. If approved by FERC and the LB Port's Board of Harbor Commissioners, SES says construction could begin by the end of 2004.

The Mitsubishi subsidiary's web site says its project "will be environmentally friendly and beneficial to the port complex and the entire Southern California region. It will also provide a stable, alternative source of natural gas, which will enhance reliability of supply and ensure price competition." (Source: www.soundenergysolutions.com).