A few LNG vessels have turned away from Freeport LNG’s export plant in Texas in recent days on expectations the plant’s restart will be delayed until December or later, according to ship tracking data from Refinitiv.
The Freeport shutdown added to the squeeze on global gas over the summer caused by Russia's invasion of Ukraine. It boosted prices in Europe and Asia to record highs, while capping gains in U.S. gas futures by leaving more fuel in the United States for domestic use.
Three different vessels have turned away from the plant in recent days as the facility is still not ready to be restarted. Until late last week, Freeport had said repeatedly that the plant, which can ship 2.1 Bcf/d, was still on track to return to service in November.
The company, however, did not mention a November restart, or any restart date, in comments made over the past few days.
As of early Nov. 16, sources familiar with Freeport’s filing said the company had not yet submitted a request to resume service to the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA). Many analysts believe that means the plant will not resume operations until December at the earliest.
A couple of vessels seem to have given up on a quick restart at Freeport.
Prism Brilliance, which waited outside the plant for about three weeks, was now sitting outside of Corpus Christi, Texas, where Cheniere Energy Inc. has an LNG export plant.
LNG Rosenrot and Prism Agility, which were expected to arrive at Freeport in late November, have since turned around in the Atlantic Ocean and were heading east.
Federal pipeline safety regulators on Nov. 15 released a heavily redacted consultant’s report that blamed inadequate operating and testing procedures, human error and fatigue for the June 8 explosion that shut the Freeport plant.
The delay in Freeport’s restart means less gas is available for Europe to import, causing prices there to spike around 21% so far this week.
Europe needs U.S. gas because Russia slashed the amount of fuel it usually exports to the rest of the continent after several European countries imposed sanctions on Moscow as punishment for its invasion of Ukraine.
The Freeport shutdown has already forced the plant’s customers to buy expensive LNG from other sources to supply their own customers.
Recommended Reading
Exxon’s Guyana Gas Project a “Win-Win,” Set for Hook-up by Year-end ‘24
2024-04-26 - Exxon Mobil Corp. CEO Darren Woods said the company’s gas-to-power project in Guyana as a “win-win proposition particularly for the people of Guyana” when completed and hooked-up by year-end 2024.
Segrist: The LNG Pause and a Big, Dumb Question
2024-04-25 - In trying to understand the White House’s decision to pause LNG export permits and wondering if it’s just a red herring, one big, dumb question must be asked.
Texas LNG Export Plant Signs Additional Offtake Deal With EQT
2024-04-23 - Glenfarne Group LLC's proposed Texas LNG export plant in Brownsville has signed an additional tolling agreement with EQT Corp. to provide natural gas liquefaction services of an additional 1.5 mtpa over 20 years.
US Refiners to Face Tighter Heavy Spreads this Summer TPH
2024-04-22 - Tudor, Pickering, Holt and Co. (TPH) expects fairly tight heavy crude discounts in the U.S. this summer and beyond owing to lower imports of Canadian, Mexican and Venezuelan crudes.
What's Affecting Oil Prices This Week? (April 22, 2024)
2024-04-22 - Stratas Advisors predict that despite geopolitical tensions, the oil supply will not be disrupted, even with the U.S. House of Representatives inserting sanctions on Iran’s oil exports.