I don't know the details since I only ever played the game in Japanese, but it seems it's Shinra fused with Omega Weapon.
Was he made by the kid or something? I know the kid that travels with you is also named Shinra in that game.
That's Almighty Shinra, arguably the best creature in the game, and second-hardest superboss. You get him through the 9th tournament.
Hi! Where does the creature in your avatar appear in X-2? I don't remember seeing it.
