
Maintenance warehouse with terminal in the background. (Source: Shutterstock.com)
Freeport LNG Development received regulatory approval to start commercial operations at its Quintana Island liquefaction and export plant.
The authorization will allow for the immediate return to service of one Freeport LNG train, which has already restarted, the company announced Feb. 21 in a press release.
It also provides for the incremental restart and full return to service of a second train. The restart and return to service of a third train will require subsequent regulatory approval once certain operational conditions are met.
“A conservative ramp-up profile to establish three-train production of approximately 2 Bcf/d is anticipated to occur over the next several weeks as stable operation of each incremental train is established and maintained,” Freeport LNG said in the release.
The news couldn't have come at a worse time for commodity markets, Rystad Energy gas and LNG market analyst Ade Allen wrote Feb. 22 in a research report pushing prices down to multi-year lows.
“The March Henry Hub futures contract settled at $2.07/MMbtu on Tuesday and dipped below $2/MMbtu in overnight trading… and a price rebound is nothing more than a pipe dream,” the analyst said.
“Liquefaction capacity limitations and the lack of new export infrastructure projects, sluggish exports to Mexico, and healthy storage inventories after a mild winter are all dampening prices,” Allen said.
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