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
E&P Highlights: Feb. 6, 2023
2023-02-06 - Here’s a roundup of the latest E&P headlines including a new well coming online and new contract awards in the upstream oil and gas industry.
E&P Highlights: Jan. 26, 2023
2023-01-26 - Here’s a roundup of the latest E&P headlines including a production update from Tullow, an update on U.K. offshore opportunities and some contract announcements in the upstream oil and gas industry.
Intelligent Completions: Sensing Through Cement
2023-02-03 - Miniature quartz gauge measures reservoir conditions through cement in real time.
Xodus Takes Strategic Approach to Decommissioning
2023-01-03 - Energy consultancy Xodus is applying its comparative assessment process as it tackles its most ambitious decommissioning project to date on the UKCS.
Baker Hughes Listens Up (and Down): Acoustic Telemetry Aids Deepwater Completions
2023-01-06 - Bi-directional communications give operators more data about the downhole environment, allowing them to make better decisions in real-time.