Jan 17 (Reuters) by Scott DiSavino – Freeport LNG’s long-shut liquefied natural gas (LNG) export plant in Texas started receiving pipeline natural gas over the long U.S. Martin Luther King Jr holiday weekend, according to Refinitiv data.
U.S. LNG exports have been steadily increasing for years and Freeport, the second biggest U.S. LNG export plant, is one of a number of key facilities for shipments around the world, where demand has soared following Russia’s decision to largely cut off piped gas supply to Europe after Moscow’s invasion of Ukraine.
Gas started flowing to Freeport on Jan. 14 and was on track to reach 69 million cubic feet per day (mmcfd) on Tuesday, according to data from Refinitiv.
A source familiar with the flows said they were within the plant’s pre-treatment facility and were maintaining the flare system.
The last time gas flowed to Freeport was in late December, also to maintain a flare system.
Officials at Freeport, which shut in a fire on June 8, 2022, said on Tuesday the plant was still on track to restart in the second half of January, pending regulatory approvals.
Freeport has not yet filed a request with federal regulators to restart the plant, according to a source familiar with the company’s filings.
Gas futures soared about 8% on Tuesday from an 18-month low in the prior session on the possibility Freeport could restart soon and on forecasts for much colder weather and higher heating demand over the next two weeks than previously expected.
Freeport’s restart timeline, however, has been delayed many times from October to November to December and then most recently to January.
Even when the company was saying the plant could restart last year, many analysts said it was likely to take Freeport until the first or second quarter of 2023 to get the plant ready due to the large amount of work needed to satisfy federal regulators, including training staff in new safety procedures.
Last week after sources told Reuters the plant would not return until February or later, at least two LNG vessels gave up on Freeport and moved to other ports, according to ship tracking data from Refinitiv.
Whenever Freeport returns, U.S. gas demand will jump. The plant can turn about 2.1 billion cubic feet per day (bcfd) of gas into LNG, which is about 2% of U.S. daily production.
(c) Thompson Reuters