LNG

Dec 15 (LNGJ) - The Freeport LNG export plant on Quintana Island in Texas has accepted a fine from the US Environmental Protection Agency to settle safety violations related to the June 8, 2022, explosion and fire at the facility that caused over $250 million of damage. The consent agreement was made public by the Federal Energy Regulatory Commission and included a civil penalty of $163,054 for breaking chemical accident prevention rules under the Clean Air Act.

   The settlement followed allegations by the EPA that Freeport LNG had failed in its duty to maintain a safe facility, did not implement recommendations from a 2021 hazard analysis and failed to punctually update its emergency contact information. Under the settlement, Freeport LNG neither admitted nor denied the allegations. The Freeport fire closed the plant for eight months and was a setback for the company as it was also looking forward to proceeding with an expansion project to increase output from around 15 million tonnes per annum of LNG from three Trains to 20 MTPA with the construction of a fourth Train.

An investigation is under way into the explosion at the Freeport liquefied natural gas export plant at Quintana Island in Texas that could reduce US Gulf Coast cargo shipments for up to three weeks, though the overall damage was now said to be limited.

Freeport LNG, the exporter of around 20 percent of US cargo volumes from three Trains on Quintana Island in Texas, has been hit by an explosive incident inside the facility and will shut for at least three weeks, affecting deliveries particularly to Japan.

McDermott International, the company involved in some of the world’s leading LNG construction projects, including several on the US Gulf Coast and the North Field Expansion in Qatar, said it had been formally notified by the New York Stock Exchange that it was not meeting price requirements for future listing.

McDermott International and Zachry Group of the US, along with Chiyoda Corp. of Japan, say that Train 2 at the Freeport liquefaction and export plant on Quintana Island in Texas has begun producing LNG and its first cargo would be shipped soon as Gulf Coast output increases from the plant build-out.

Freeport LNG, the latest US export plant to come on stream at Quintana Island on the US Gulf coast of Texas, said it planned to launch its own LNG cargo sales windows with trading platform provider, Redwood Marketplace.

Freeport LNG, the project advancing towards first output by the end of 2019 on Quintana Island in Texas, has received approval from the US Department of Energy for the export of Train 4 volumes to Non-Free Trade Agreement countries, opening the way for marketing to start.

Toshiba Corp. of Japan said it had decided to cancel a plan to dispose of its US LNG business, including volumes from the Freeport liquefaction and export plant being constructed in Texas, to the Chinese ENN group and to relaunch the bidding process.

Toshiba Corp. said it was facing regulatory hold-ups in its planned off-loading of its US liquefied natural gas business in Texas to a Chinese company, including a tolling agreement for the Freeport LNG project.

The Japanese conglomerate said it was facing complications as the group also attempts to restructure its widespread business operations.

Toshiba, attempting to emerge from a crisis caused by an accounting scandal and massive losses in the nuclear business, is currently in a five-year recovery plan and is set to pay China’s ENN Group to take over a 20-year tolling agreement at the Freeport plant on Quintana Island.

The ENN Group has agreed to accept over $800 million to assume Toshiba’s commitment to the 20-year deal that would amount to 2.2 million tonnes per annum of LNG from the Freeport facility under a liquefaction tolling agreement (LTA) structure.

Under the original plan, the Toshiba-ENN transaction was expected to be completed by the end of March 2019.

Toshiba now says it is facing a delay in securing approval from the Committee on Foreign Investment in the United States, a federal agency that examines the national security implications of foreign investments.

Toshiba had hoped the losses on its LNG investment would not be carried over from the previous fiscal year to the coming business year.

The Japanese group entered the LNG market in 2013 by signing its agreement with Freeport.

ENN Group is a natural gas and LNG market participant listed in Hong Kong.

In China, ENN supplies gas in cities, operates pipelines and engages in gas trading. It is trying to diversify its supply sources by purchasing the Toshiba operations.

Toshiba now say that it hoped to complete the transfer of its interests in the LNG business before the end of April 2019 or shortly thereafter.

The Toshiba deal with ENN involves concluding a purchase and sales agreement for the transfer of all outstanding shares of Toshiba America LNG Corp. to ENN.

Toshiba is making a provision for a 93 billion yen ($838M) loss on its Freeport LNG accord and related activities.

US regulators have approved the start-up of the Texas Eastern Transmission’s portion of the Stratton Ridge Expansion pipeline project designed to provide feed-gas to the Freeport LNG export plant at Quintana Island in Texas.