Natural Gas Facility OKd for the Port of Long Beach

The Port of Long Beach may become home to the first West Coast facility for the processing of liquefied natural gas under an agreement approved Monday night by the Harbor Commission.

The commission approved a letter of intent with Sound Energy Solutions, a subsidiary of Mitsubishi Corp., to build a $400-million LNG terminal on 27 acres on Pier T, port spokesman Art Wong said.

High natural gas prices have produced a flurry of proposals to build LNG facilities along the coastline of Baja California as well as a now-abandoned proposal for one in Oxnard. Such facilities pipe liquefied natural gas from ships, convert the fuel into natural gas and send it by pipeline to gas customers.

The Long Beach project, which must first receive approval from the Federal Energy Regulatory Commission, could begin operation as early as 2007, Wong said.

The port would receive payments based on how much LNG the facility processes. If the terminal handles the projected 68.3 million barrels of LNG a year, the port would receive $3.7 million annually, Wong said.

The proposed LNG facility could supply as much as 10% of California’s natural gas needs, said Christopher Garner, director of the Long Beach Energy Department, the city of Long Beach’s gas utility. Long Beach would buy a portion of the project’s gas, he said.

Sound Energy Solutions could not be reached for comment.