Freeport LNG, the second-biggest U.S. LNG exporter, got approval from federal regulators on Jan. 26 to take early steps to restart its export plant in Texas. The plant has been idled by a June explosion.
Freeport, however, has not yet sought permission to restart the liquefaction trains that turn natural gas into LNG for export. That resumption of LNG production will have to come in a later request with federal regulators.
Energy analysts have said they still expect most of the plant's production to remain offline until March or later.
The closely-held LNG company's plant shut after a pipeline explosion on June 8, 2022, and was barred from resuming production until federal regulators completed an extensive safety review and approved resulting changes.
The U.S. Federal Energy Regulatory Commission (FERC) and the Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) granted Freeport's request to begin cooling down some of the plant's piping systems.
The procedure to cool down the pipes, which Freeport said would take about 11 days, would be a first step to returning the facility to normal operations after a seven-month outage.
FERC said in its filing that "additional authorization to restart operations is necessary to reinstate service ... of the liquefaction trains."
Before the regulators’ decision on Jan. 26, U.S. gas futures were down almost 10% to a 21-month low of $2.76 per MMBtu. After the approval news, futures pared some of those losses, but were still down about 7%.
The market expects prices will rise once demand for gas increases after the plant returns to service.
The facility can draw in around 2.1 Bcf/d of gas when operating at full power.
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.
Recommended Reading
Crescent Point Divests Non-core Saskatchewan Assets to Saturn Oil & Gas
2024-05-07 - Crescent Point Energy is divesting non-core assets to boost its portfolio for long-term sustainability and repay debt.
Sitio Closes D-J Basin Deal, Looks to Defragment Minerals Space
2024-05-09 - Sitio Royalties closed its acquisition of 13,062 net royalty acres. CEO Chris Conoscenti has a strong pipeline of minerals acquisition opportunities.
Magnolia Bolts-on 27,000 Acres in South Texas’ Giddings Field
2024-05-09 - Magnolia Oil & Gas said it paid $125 million to a private operator to acquire the acreage, which has minimal production.
CEO: FireBird II Prowls Western Midland Basin for M&A, Deep Exploration
2024-05-23 - After selling the first FireBird Energy to Diamondback for $1.6 billion, the FireBird II team is adding leases and scaling oil production in the western Midland Basin, CEO Travis Thompson said at Hart Energy’s SUPER DUG Conference & Expo.
Sell High, Invest Low: Kinetik CEO on Creating Value with Durango Deal
2024-05-23 - Kinetik CEO Jamie Welch walks through the company's process for acquiring Durango Permian, including selling its 16% stake in the Gulf Coast Express pipeline, and shares his takeaways on challenges in the Permian today, in this Hart Energy Exclusive interview.