Freeport LNG, the second biggest U.S. LNG exporter, sought approval from federal regulators to start loading LNG onto ships at its long-idled export plant in Texas, according to a filing made available on Feb. 2.
The Freeport plant shut in a fire in June and was barred from restarting until federal regulators completed an extensive safety review and approved resulting changes.
Specifically, Freeport said in its filing with the U.S. Federal Energy Regulatory Commission (FERC) that "reinstatement of Dock 1 LNG loading services will allow Freeport to recommence normal LNG ship dockage and loading operations."
Freeport, which asked regulators for a response by Feb. 3, also said loading LNG onto ships will "create inventory space within [storage] Tanks 1 and 2 in anticipation of obtaining agency authorization for commercial operation of" one of the plant's three liquefaction trains.
FERC approved Freeport's request to start producing LNG in the third liquefaction train on Feb. 1.
The liquefaction trains turn natural gas into LNG.
U.S. gas futures rose as much as 5% on Thursday, up from a 21-month low in the prior session, following Freeport's latest request to restart parts of the export plant.
The energy market cares about Freeport because gas prices will likely rise (as happened on Feb. 2) as the plant moves closer to pulling in large amounts of gas to make LNG.
Freeport can turn about 2.1 Bcf of gas into LNG each day. That is about 2% of total U.S. daily gas production.
Analysts, however, do not expect Freeport to reach full capacity until mid-March or later.
"It is likely that Freeport will not regain full operational strength until mid-March furthering very weak supply/demand natural gas fundamentals into mid-to-late February," analysts at energy consulting firm EBW Analytics told customers in a note.
Japan's largest power company JERA, one of Freeport's five top customers, said this week that it was not counting on getting LNG from the plant by the end of March.
The outage forced big customers including JERA and Osaka Gas to book hundreds of millions of dollars of losses. Its other big buyers include BP, TotalEnergies and SK E&S.
Recommended Reading
The ABCs of ABS: Financing Technique Shows Flexibility and Promise
2024-07-29 - As the number of ABS deals has grown, so have investors’ confidence with the asset and the types of deals they are willing to underwrite.
Solaris Stock Jumps 40% On $200MM Acquisition of Distributed Power Provider
2024-07-11 - With the acquisition of distributed power provider Mobile Energy Rentals, oilfield services player Solaris sees opportunity to grow in industries outside of the oil patch—data centers, in particular.
Archrock Offers Common Stock to Help Pay for TOPS Transaction
2024-07-23 - Archrock, which agreed to buy Total Operations and Production Services (TOPS) in a cash-and-stock transaction, said it will offer 11 million shares of its common stock at $21 per share.
The ABCs of ABS: Financing Technique Shows Flexibility and Promise
2024-07-29 - As the number of ABS deals has grown, so have investors’ confidence with the asset and the types of deals they are willing to underwrite.
Cibolo Energy Closes Fund Aimed at Upstream, Midstream Growth
2024-09-10 - Cibolo Energy Management LLC closed its second fund, Cibolo Energy Partners II LP, meant to boost middle market upstream and midstream companies’ growth with development capital.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.