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Released October 21, 2022 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Freeport LNG's (Houston, Texas) liquefied natural gas (LNG) production and export plant in Texas is aiming to have more than 85% capacity back online in November. However, the company still must clear hurdles from the U.S. Pipeline Hazardous Materials and Safety Administration (PHMSA) before the restart.
The Freeport plant, which can process 2 billion cubic feet per day of natural gas and export up to 15 million metric tons of LNG per year, suffered an explosion and fire June 8, forcing the plant to shut down. Repair works have been ongoing since that time, with the aim for a partial restart later this year. The company hopes to return to 100% capacity by March. Subscribers to Industrial Info's Global Market Intelligence (GMI) Production Project Database can click here for the repair project details.
However, next month's partial restart may be more of a challenge than anticipated, as the PHMSA has said it must grant full approvals before the restart can begin, meaning Freeport cannot begin the partial restart until all of its proposed changes to the plant are approved by the agency. Only pieces of the plan have been accepted so far. Alex Munton, director of global gas at Rapidan Energy Group (Washington, D.C.), told Reuters: "Come November, it is not going to be a question of whether Freeport can or wants to restart, it is going to be [PHMSA's] decision."
Russia's invasion of Ukraine forced global LNG prices up as Western Europe has attempted to wean itself from Russian natural gas. Prices have cooled somewhat over the past weeks as gas storage in Europe is now above 90% and LNG tankers are reportedly queuing up at European ports to unload cargoes into a place where regasification terminals presumably are working at or near full capacity.
The Freeport shutdown as well as the planned shutdown this month of Berkshire Hathaway's (NYSE:BRK.A) (Omaha, Nebraska) Cove Point LNG export plant in Maryland have left more natural gas for U.S. utilities to fill storage reserves before winter, resulting in declining domestic prices in past weeks, although still elevated compared with last year. The Cove Point shutdown began early this month and is expected to be completed in late October. Subscribers to Industrial Info's Offline Event Database can click here for the shutdown reports on Cove Point.
The return of the Cove Point and Freeport plants once again will remove some domestic U.S. natural gas supply, but an even bigger dip may be seen in the coming months as Venture Global LNG (Arlington, Virginia) wraps up Phase II construction of its Calcasieu Pass plant in Louisiana. Construction on the four production modules began last year, and upon completion, planned for early next year, the second phase will add an additional 5 million metric tons of LNG production capacity to the plant. Subscribers can click here for the project report.
In related news, the U.S. Federal Energy Regulatory Commission (FERC) last week granted Freeport an additional two years to construct a fourth production train at its Texas plant. The previous deadline to construct the train was May 2026, but FERC has now extended this to August 2028. The train would add another 5.1 million tons of production capacity. Subscribers can click here for more details.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
The Freeport plant, which can process 2 billion cubic feet per day of natural gas and export up to 15 million metric tons of LNG per year, suffered an explosion and fire June 8, forcing the plant to shut down. Repair works have been ongoing since that time, with the aim for a partial restart later this year. The company hopes to return to 100% capacity by March. Subscribers to Industrial Info's Global Market Intelligence (GMI) Production Project Database can click here for the repair project details.
However, next month's partial restart may be more of a challenge than anticipated, as the PHMSA has said it must grant full approvals before the restart can begin, meaning Freeport cannot begin the partial restart until all of its proposed changes to the plant are approved by the agency. Only pieces of the plan have been accepted so far. Alex Munton, director of global gas at Rapidan Energy Group (Washington, D.C.), told Reuters: "Come November, it is not going to be a question of whether Freeport can or wants to restart, it is going to be [PHMSA's] decision."
Russia's invasion of Ukraine forced global LNG prices up as Western Europe has attempted to wean itself from Russian natural gas. Prices have cooled somewhat over the past weeks as gas storage in Europe is now above 90% and LNG tankers are reportedly queuing up at European ports to unload cargoes into a place where regasification terminals presumably are working at or near full capacity.
The Freeport shutdown as well as the planned shutdown this month of Berkshire Hathaway's (NYSE:BRK.A) (Omaha, Nebraska) Cove Point LNG export plant in Maryland have left more natural gas for U.S. utilities to fill storage reserves before winter, resulting in declining domestic prices in past weeks, although still elevated compared with last year. The Cove Point shutdown began early this month and is expected to be completed in late October. Subscribers to Industrial Info's Offline Event Database can click here for the shutdown reports on Cove Point.
The return of the Cove Point and Freeport plants once again will remove some domestic U.S. natural gas supply, but an even bigger dip may be seen in the coming months as Venture Global LNG (Arlington, Virginia) wraps up Phase II construction of its Calcasieu Pass plant in Louisiana. Construction on the four production modules began last year, and upon completion, planned for early next year, the second phase will add an additional 5 million metric tons of LNG production capacity to the plant. Subscribers can click here for the project report.
In related news, the U.S. Federal Energy Regulatory Commission (FERC) last week granted Freeport an additional two years to construct a fourth production train at its Texas plant. The previous deadline to construct the train was May 2026, but FERC has now extended this to August 2028. The train would add another 5.1 million tons of production capacity. Subscribers can click here for more details.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
