LNG

March 9 (LNGJ) - Freeport LNG Development said it received regulatory approvals from the Federal Energy Regulatory Commission and the Pipeline and Hazardous Materials Safety Administration to restart Train 1, the final required re-start at Freeport’s three-Train liquefaction facility at Quintana Island in Texas. “Freeport LNG's Trains 2 & 3 returned to full commercial operation in recent weeks, reaching production levels in excess of 1.5 billion cubic feet per day,” said the company.

   “As the recommissioning of Freeport's liquefaction facility continues and Trains are restarted, changes in feed-gas flows and production rates are to be anticipated, given the duration of the plant's outage. As previously stated, a conservative ramp-up profile to establish full three-Train production is anticipated to occur over the next few weeks,” Freeport stated.

The US Pipeline Hazardous Materials Safety Administration (PHMSA) said it would still take several months for the Freeport liquefied natural gas export plant to fully ramp up and to bring all processing Trains and other facilities on stream.

Freeport LNG has provided an update on its re-start plants stretching into the first quarter of 2023  because of repairs and production and operational changes.

US export plant Freeport LNG in Texas plans to undertake a facility overhaul of work and safety methods as it prepared to return to full production ramp-up by March 2023 after the shut-down caused by the June 8 fire in 2022.

Freeport LNG Development has confirmed that initial production of the fire-damaged facility will not restart until early to mid-November, a month later than earlier predicted.

Freeport LNG Development and the US Pipeline Hazardous Materials Safety Administration (PHMSA) have signed a Consent Agreement to enable the possible restart of partial operations in October.

The facility was closed, following an 8^th June fire and explosion, which occurred at the Texas Freeport LNG's liquefaction plant.  

Under the terms of the agreement, the obligations are intended to ensure that Freeport LNG can safely resume initial LNG production and thereafter ultimately return to full operation of all its liquefaction facilities.

In the near term, the agreement includes certain corrective measures, many of which are currently underway, that Freeport LNG is to take to obtain PHMSA approval for an initial resumption of LNG production at its liquefaction facility.

Freeport LNG said that it believed that it can still complete the necessary measures, along with repair and restoration activities, in order to resume initial operations in early October.

Initial operations are expected to include three liquefaction trains, two LNG storage tanks and one LNG loading dock, which the company said will enable it to deliver around 2 bill cu ft per day of LNG - enough to support its existing long-term customer agreements.

In addition to the repair and replacement of Freeport LNG's infrastructure that was damaged in the incident, and as part of the corrective measures to be taken under the agreement, the company is evaluating and promoting initiatives on training, process safety management, operations and maintenance procedure improvements, and facility inspections, the operator said.

Freeport was the second largest US LNG export facility, supplying up to 20% of exports before the fire and explosion caused the complete shutdown of the facilities. 

The explosion was caused by an over-pressurised pipeline, US investigators have reported. 

As a result of the announcement, US natgas prices jumped by more than 7% on Wednesday.

US attorneys general in Democratic Party-ruled states and cities have started a new campaign against hydrocarbons by trying to force the government regulatory agency, the Pipeline and Hazardous Materials Safety Administration (PHMSA), to ban for ever all transportation of liquefied natural gas by rail.

A coalition of 14 state attorneys general have urged the PHMSA to turn a suspension order on allowing bulk transport of LNG in specialized rail-car tanks into a total ban.

The rule opening the way for LNG transportation in rail cars was created after a 2019 executive order by the Trump Administration, which prompted the Department of Transportation to regulate LNG the same “as other cryogenic liquids and permit LNG to be transported” in approved rail-car storage tanks.

The PHMSA has noted that LNG is allowed to be transported by rail in Canada, Europe and in Japan.

“LNG is permitted to be transported by rail in Europe in specially designed tank cars and in Japan, LNG has been authorized to be transported by rail since 2000, in specially designed freight railcars and container railcars,” the agency said.

However, the Democratic Party AGs also brought in anti-hydrocarbon arguments by stating that allowing companies to transport LNG could “potentially create more greenhouse gases from LNG production and from liquefaction” plants.

The coalition of AGs is led by the state of Maryland’s Brian Frosh and New York’s AG Letitia James.

Policy confusion

The federal agency in the initial suspension of rail transportation of LNG had referred to public concerns about transporting the fuel and ordered a suspension pending further studies.

The PHMSA said at the time that its move was necessary to help companies interested in shipping LNG by rail to suspend investments in infrastructure that would be facing further regulations.

However, instead of enacting more thorough regulations, the coalition called for the “prompt suspension” of the final rule indefinitely.

The AGs claimed that the go-ahead for transporting LNG by rail was based on “flawed safety assessments” by officials of the former Administration.

“While repeal of the 2020 rule would be the most durable corrective action, the states support prompt suspension of those regulations in the meantime,” the coalition of AGs wrote in comments to the Biden Administration.

Many of the same AGs submitted comments against the final rule when it was proposed in January 2020. The AGs also had joined a lawsuit against the rule in August 2020.

No LNG was transported by rail between the final rule’s approval and the PHMSA’s November suspension. 

The PHMSA said it was aiming to ensure shipments did not occur before the new rules were in place, which is expected by June 2024. 

The US Government is expanding federal oversight of natural gas pipelines nationwide affecting gas gatherings systems supplying feed gas to LNG export facilities and to domestic pipeline customers.

Enbridge Inc., the Canadian company whose natural gas pipelines span North America to connect supply basins and LNG export plants and cities, has filed a federal complaint accusing Michigan Democratic Party Governor Gretchen Whitmer and the state of acting like an energy regulator and trying to deprive poorer Michigan families of fuel by seeking to cut off the Line 5 pipeline under a small corner of the Great Lakes.

US federal regulators have issued a final rule allowing the bulk transport of liquefied natural gas in specialized tanks on rail cars to help boost the small-scale LNG projects sector across America.