LNG

Freeport LNG has updated the timing of the initial restart of its liquefaction facility on Quintana Island in Texas after repairs and refurbishment following the June 2022 fire.

“The company continues to make notable progress on its path towards the restart of liquefaction operations,” said Freeport.

“As of December 23rd, the reconstruction work necessary to commence initial operations is substantially complete, and the company is submitting responses to the last remaining questions included in the Federal Energy Regulatory Commission’s data request,” added the company.

Freeport explained that given the time needed for the regulatory agencies to review the company’s responses and to seek any necessary clarification, Freeport LNG now does not anticipate commencing the initial restart of its liquefaction facility until the second half of January 2023.

“The company continues to have close, collaborative engagement with the regulatory agencies and that engagement will continue as Freeport LNG works towards the safe restart of its facility,” stated Freeport.

When the explosion occurred, Freeport’s Chairman and Chief Executive Michael Smith and his team had been planning for an expansion from 15 million tonnes per annum of output from three Trains to 20 MTPA with the construction of a fourth Train.

Customers

Freeport LNG's main customers include Japan’s largest importer JERA Co. Inc., the Japanese utilities Kansai Electric and Osaka Gas as well as South Korean company SK E&S and buyers in Europe.

During the first quarter of 2022 before the accident, the Freeport plant exported 55 cargoes mainly to import terminals in Europe and North Asia

Freeport shut on June 8 after a pipe failure caused an explosion due to inadequate operating and testing procedures, human error and fatigue, according to a report by consultants hired by the company to review the incident and suggest action.

Even without Freeport volumes, the amount of gas flowing to US LNG export plants hit 13.0 billion cubic feet per day last week, the most since May 2022, 10 days before the Freeport shutdown.

The Freeport closure meant the nation’s other six large-scale export plants have been operating near full capacity.

The Freeport LNG plant on Quintana Island in Texas was unable to produce LNG on September 14 as all three liquefaction trains were knocked off stream by power issues caused by tropical storm Nicholas, which hit the Gulf Coast..

The Freeport plant is located in Brazoria County, south of Houston, and widespread power outages were reported in the county.

“Nicholas moved slowly across the Houston metropolitan area,” said the US National Oceanic and Atmospheric Administration’s Hurricane Center.

“Life-threatening flash floods are expected across portions of the Deep South during the next couple of days,” added the statement.

The storm made landfall along the coast west of Quintana where Freeport LNG is sited.

A statement from Freeport said the situation was continuing to be assessed and no other damage was reported at the plant,

The Freeport facility is the only one in the US that uses exclusively electric motors instead of natural gas turbines to drive the liquefaction compressors.

In addition to the three Trains currently constructed, it has proposed adding a fourth, though it has yet to sanction the investment until commercial support is finalized.

Maintenance

Hours before the storm hit, the Freeport facility was operating normally and continuing to produce LNG.

Before the current temporary outage, Freeport had just returned one liquefaction Train to service in the first week of September after a brief spell of maintenance.

Analysts note that high demand for US LNG from nations like China, Japan and South Korea as well as Brazil in South America has meant very high utilization rates at all six US liquefaction terminals.

The Freeport operating company, whose Chief Executive is the energy entrepreneur Michael Smith, produces around 15 million tonnes per annum of LNG.

It has use-or-pay liquefaction tolling agreements for most of the output from the three Trains with customers including European and Japanese contract holders, BP of the UK, Germany’s Uniper and Japan’s Jera Co. Inc. and Osaka Gas.

US Freeport liquefied natural gas plant owner and Chief Executive Michael Smith said he expected to be shipping cargoes for decades from the Texas facility at Quintana Island.

Freeport LNG in Texas is shipping its first cargo to the Middle East in a move underscoring the benefits of the US shale boom that has boosted the nation's resources since the facility on Quintana Island was first conceived as an import terminal in 2004.