(May 19, 2005) -- Mitsubishi's wholly-owned subsidiary Sound Energy Solutions (SES) has entered into a Joint Development Agreement with a subsidiary of ConocoPhillips (COP) to jointly develop a proposed Liquefied Natural Gas (LNG) facility in the Port of LB.

Mitsubishi said in a May 17 release that SES and COP "have established an equally-owned joint venture company, SES Terminal LLC, to further develop a Liquefied Natural Gas (LNG) import terminal in the Port of LB. The partners in the new firm said they expect a final investment decision to commence construction of the terminal in the first half of 2006 after obtaining all necessary approvals and permits from relevant federal, state and local authorities. The terminal is expected to be completed and become operational in 2009."

"We are very excited about this joint company," said Thomas E. Giles, the SES executive now identified in the release as President and CEO of newly established SES Terminal LLC.

"Combining the skills, assets, and long histories of both Mitsubishi Corporation and ConocoPhillips in the LNG business will allow us to provide the City of Long Beach and the State of California with a state-of-the-art facility that will help clean the air and provide stability in the natural gas market," Mr. Giles said in the release.

A May 17 ConocoPhillips release said in part, "This terminal is part of a larger effort by ConocoPhillips to meet growing demand for natural gas around the world. The company is developing or has proposed U.S. regasification facilities in Freeport, Texas, offshore Alabama and Louisiana. ConocoPhillips has an active liquefaction facility in Kenai, Alaska, as well as others at various stages of development around the world, including Australia, Nigeria, Qatar, Russia and Venezuela."

On learning of the development, Bry Myown of LB Citizens for Utility Reform, an opponent of the proposed Port-sited project, told LBReport.com: "This is a big deal. It's a major, royal wedding of the offspring of two corporate giants."

"The SES terminal would help strengthen the company’s portfolio of natural gas projects around the world," said Rick Hernandez, Executive Vice President, SES Terminal LLC, quoted in a ConocoPhillips release. "ConocoPhillips looks forward to building on our long-standing relationship with Mitsubishi through this collaboration on the SES terminal. We will work together to broaden our relationships within the local community and those built by our Los Angeles Refinery," he added. (In a Mitsubishi release, Mr. Hernandez adds, "ConocoPhillips looks forward to building on our long-standing relationship with Mitsubishi Corporation through this collaboration on the SES terminal.")

Mr. Hernandez told LBReport.com that he is not related to LB Mayoral candidate and public figure Randal Hernandez. [Yes, we called Conoco's Hernandez before dawn CA time and asked.] Rick Hernandez, who has been part of Conoco's LNG operations for a number of years, said the shared name is purely coincidental.

In 2004, LBReport.com reported on an MOU between SES and Conoco, apparently prompted by an ability to strip-off and send so-called "hot gases" (like ethane and propane which can accompany some types of LNG and must be removed under CA environmental laws) via a not-yet existing pipeline from the proposed PoLB LNG site (southern end of Pier T, southeastern part of Port) to the ConocoPhillips refinery in Carson.

Ms. Myown said the newly announced agreement is different...and much bigger. "Attempts to put nearly 85 million gallons of LNG roughly one and a half miles from downtown LB will now effectively be backed by subsidiaries of two of the biggest corporations on the planet," she said.

Ms. Myown noted that Mitsubishi subsidiary SES did not seek permission to build the facility from CA's Public Utilities Commission (CPUC), instead applying to the Federal Energy Regulatory Commission (FERC) which claimed exclusive federal authority in siting and regulatory matters. The Port has also assisted SES in processing its FERC application.

The LB-created controversy has spawned LNG verbiage giving FERC clear supremacy over state bodies as part of a federal Energy bill passed by the House of Representatives in April. Senate LNG provisions haven't been disclosed as we post.

Ms. Myown added, "The Port of LB has been the handmaiden in hurting LB local interests by tacitly supporting federal supremacy on LNG siting and safety here. Our Port has put the rights of all fifty states at risk."