The U.S. Federal Energy Regulatory Commission (FERC) approved privately held Freeport LNG’s plan to build and operate a fourth liquefaction train at its Freeport LNG export terminal in Texas.
Freeport said it expects the U.S. Department of Energy to authorize Train 4 to sell LNG to non-Free Trade Agreement countries later this quarter.
Earlier this week, KBR Inc. (NYSE: KBR) said Freeport picked the engineering firm as the preferred bidder to build Train 4.
Freeport has said it could make a final investment decision to build Train 4 during the second quarter with the plant expected to enter service in 2023.
Freeport said Train 1 is on track to enter service in the third quarter followed by Train 2 in first-quarter 2020 and Train 3 in second-quarter 2020.
When Freeport started building the first three trains at the $13 billion facility it projected the units would enter service between the fourth quarter of 2018 and the fourth quarter of 2019.
McDermott International Inc. (NYSE: MDR) is the lead contractor for the first three units at Freeport.
Freeport has said the first cargoes from the plant would likely start in late July.
Each train at Freeport will have the capacity to produce about 5 million tonnes per annum (mtpa) of LNG or around 0.7 billion cubic feet per day (bcf/d) of natural gas. One billion cubic feet is enough gas to supply about 5 million U.S. homes for a day.
Freeport has said it has 20-year contracts to sell LNG to Japanese gas companies Osaka Gas Co Ltd and JERA—an alliance between Japanese power companies Tokyo Electric Power Co. Holdings Inc. and Chubu Electric Power Co Inc.—from Train 1, British oil major BP Plc (NYSE: BP) from Train 2 and Japanese engineering firm Toshiba Corp. and South Korean energy company SK E&S from Train 3.
Freeport also has a three-year deal to sell 0.5 mtpa of LNG to multinational commodity trading firm Trafigura Group Pte Ltd. starting in July 2020.
In addition, Freeport has said it is working on a 20-year deal to sell 2.2 MTPA of LNG to a unit of Japanese trading firm Sumitomo Corp. from Train 4.
Stratas Advisors expects a storage build of 99 Bcf this week.
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