Freeport LNG asked federal regulators for approval to add natural gas to one of its three idled units, a milestone in efforts to restore production after a seven-month outage at the second-largest U.S. LNG, according to a federal filing.
The Texas gas processing plant shut after a fiery blast last June, cutting supplies as global LNG demand soared over Russia's invasion of Ukraine. Federal officials barred the 15 million tonne-per-year producer from resuming production until they could complete an extensive safety evaluation and upgrade.
The June 8 shutdown drove up global prices for the superchilled gas to record levels just as Europe was struggling to replace supplies of Russian gas cut following Europe's imposition of sanctions on Moscow for the Ukraine war.
Freeport LNG in a filing dated Monday asked the U.S. Federal Energy Regulatory Commission (FERC) for permission to put gas into one of the plant's three liquefaction units for "initial LNG production."
Even with the steps proposed, analysts believe it could be months before the plant's three units will be fully operational.
“Our expected timeline for restart remains mid-March," wrote Rystad Energy analyst Ade Allen in a report published before the FERC filing was posted. "We expect it will take about 60 days from restart to 100% utilization," the analyst said.
That shutdown has left more gas available to domestic customers, helping contribute to depressed U.S. prices for natural gas. U.S. gas futures NGc1 traded at a 21-month low this week. NGA/
Freeport can draw up to 2.1 Bcf/d of natural gas and turn it into LNG when operating at full power. That is about 2% of what U.S. gas producers pull out of the ground each day.
Oilfield Service Outlook: Earnings Will be Driven by Everything, Everywhere, All at Once
2023-01-27 - International growth, along with offshore and strength in North America, propelled fourth quarter and 2022 earnings for oilfield service companies SLB, Baker Hughes and Halliburton.
Halliburton Notches 21% Earnings Jump, Plans to Hike Cash Flow Returns to Shareholders
2023-01-25 - Halliburton’s Q4 earnings surge, as company says it aims to return 50% of its free cash flow to shareholders.
SLB Beats Expectations with Strong Q4 Earnings
2023-01-20 - SLB relies on upswings from its digital unit, along with its offshore and Middle East operations, to spur a 13% jump in quarterly earnings, although some analysts were underwhelmed by the company's free cash flow.
Williams Deepwater GoM Expansions Add Significant Growth
2023-02-22 - Williams reported another year of record financial performance, and six key projects underway in the U.S. Gulf of Mexico will drive impressive EBITDA growth in coming years.
SM Energy Boosts Q4 Income But 2023 Guidance Underwhelms
2023-02-24 - Lower-than-estimated fourth-quarter oil production volumes are expected to stretch through 2023, while capex is expected to increase by over $200 million.