(Dec. 13, 2006) -- Sound Energy Solutions (SES), which seeking to build and operate an 80+ million gallon Liquefied Natural Gas (LNG) facility in the Port of LB, has released a letter publicly disclosing salient terms of the firm's latest financial package offered to the City.
SES (originally a wholly owned Mitsubishi subsidiary; in May 2005, ConocoPhillips joined Mitsubishi in a 50/50
partnership for the development of the terminal) calls it "one of the most financially beneficial packages ever offered to the Port of Long Beach or the City."
The December 13, 2006 letter, released by the company and posted in full on a link below by LBReport.com, is signed by SES President/CEO Tom Giles and Exec. VP/COO Rick Hernandez...and represents that after at least four meetings between SES and Long Beach Gas & Oil, SES' latest offer to the city consists of:
Term -- 25 years.
Discount to Long Beach citizens -- $0.15/MMBTU discount to Southern California weighted average cost of natural gas (value of approximately $1 million per year).
Up to $100 million to be paid over the life of the project into the General Fund for Police, Fire or any other use the City Council should decide upon
Closing bonus to the City in the amount of $4 million at ground breaking
Approximately $10 million per year in additional wharfage fees and property tax fees paid by the terminal, once built.
"We believe the details of the financial package have not been brought to the attention of City Council members," the SES letter states.
A May 26, 2006 city management memo [from LB Gas & Oil Director Chris Garner to City Manager Jerry Miller] for the Mayor and City Council [posted in full on LBReport.com] didn't cite specifics but stated in part, "This new offer demonstrates significant progress has been made in improving the value provided to the citizens of Long Beach and the city"...and the SES Dec. 13 letter quotes this statement.
Management's May 2006 memo also went on to say [in verbiage not cited in SES' Dec. 13 letter], "[T]his is not mean to imply that negotiations are complete or that staff is fully satisifed with the overall value of the current offer..." and for its part, SES' Dec. 13 letter states, "From our perspective, we have been and remain ready to bring these negotiations to conclusion."
[LBReport.com has requested a copy of a December 2006 memo from city management to the Mayor and Council regarding the LNG negotiations. We plan to post it when we get it. Check back with LBReport.com, click reload or refresh on your browser for updated coverage.]
To view the SES-released Dec. 13, 2006 letter in full, click here.
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