Freeport LNG’s December Deadline At Risk

Wednesday, 14 December 2022
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Freeport LNG, one of the world’s largest LNG plants, is at risk of missing its December deadline for the restart of commercial operations. The plant has been offline since a fire incident on 8 June.

Following a visit to the plant at the end of November, US regulators have issued new requirements that must be met before LNG exports could resume, placing the latest restart deadline of mid-December at risk. 

Previous deadlines placing the resumption of at least some exports in September and November have already been missed. Freeport LNG, meanwhile, continues to hold on to its plan to restart commercial operations in December

Freeport LNG, one of the world’s largest LNG plants, is at risk of missing its December deadline for the restart of commercial operations.

The plant has so far missed all of its targeted restart deadlines.

The operator initially envisioned partial operations could resume ‘approximately 90 days’ after the 8 June fire incident but without specifying available capacity.

Freeport LNG’s most recent public update on the progress of the plant’s reinstatement said work was ‘90% complete’. At the time, the company said ‘reconstruction work [is] anticipated to be completed by the end of November’ with initial production at the facility targeted for ‘mid-December’.

lng market tracker 12 dec

Freeport LNG maintained its plans to restart commercial operations in December remain unchanged when speaking to Reuters on 12 December.

December deadline at risk

However, even this new deadline now seems at risk of being missed.

According to Reuters, the Federal Energy Regulatory Commission (FERC) notified Freeport LNG of a detailed list of 64 regulatory conditions that must be met before permission to restart production could be granted following a visit on 30 November.

Earlier that month, the Pipeline and Hazardous Materials Safety Administration (PHMSA) highlighted inadequate valve testing and alarm procedures that gave room for ‘operator discretion’ and ‘alarm fatigue’.

Flat out production

The Freeport plant had previously ascended as a major source of LNG to Europe at a time when the continent by and large is scrambling to diversify its gas procurement portfolio away from Russia.

The plant produced close to capacity in April and flat out in May, according to our data.

Roughly 37pct of its exports since September 2019 have been shipped to European buyers, with that share jumping to 66pct for the first five months this year.

Some 0.75mmt of its output had been going to Europe in May, up 0.44mmt (141pct) from 0.31mmt in April and 0.16mmt (27pct) from 0.59 in March, according to our data.

The Dunkerque Le Clipton terminal was the main destination for its LNG in the first five months of the year.

Large-scale operation

The Freeport plant is the seventh largest in the world and the second largest in the United States with 15 million tonnes per annum in liquefaction capacity.

Freeport was formed in 2002 to develop, own and operate an LNG terminal on Quintana Island, near Freeport, Texas.

The terminal started LNG import operations in June 2008 but was later converted into a gas liquefaction plant, which began export operations in 2019.

The Freeport plant is the seventh largest in the world and the second largest in the United States with 15 million tonnes per annum in liquefaction capacity.

Freeport was formed in 2002 to develop, own and operate an LNG terminal on Quintana Island, near Freeport, Texas.

The terminal started LNG import operations in June 2008 but was later converted into a gas liquefaction plant, which began export operations in 2019 

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