Top U.S. gas exporter, Freeport LNG, is expected to further extend the seven-month-long outage of its export plant in Texas to February, as it awaits regulatory approvals, three sources told Reuters on Jan. 11.
Accounting for 20% of U.S. LNG exports, restarting the facility is important to ease the squeeze of global LNG supplies, especially as Europe is rebuilding its gas storage after Russia cut gas exports following Moscow's invasion of Ukraine.
"There has been no official messaging, but nobody expects any cargoes until end-February at the earliest," one of the sources said.
"Second half of January is now out of sight," another source said.
A Freeport LNG spokeswoman said the restart timeline still stands and the company was still targeting the second half of this month for the safe, initial restart of its liquefaction facility, pending regulatory approvals.
The facility was initially expected to restart in October, but pushed back that target several times since the plant first closed on June 8 following a fire that a consultants' report determined was due to inadequate operating and testing procedures, and human error and fatigue.
In late December, the company said reconstruction work was substantially complete but regulators need to approve the restart, adding it did not anticipate the initial restart of its liquefaction facility to begin until the second half of January 2023.
The delays have forced big customers including JERA and Osaka Gas9532.T to book hundreds of millions of dollars of losses. Its other big offtakers include BP, TotalEnergies and SK E&S.
U.S. LNG exports have been steadily increasing for years and in 2022, the United States became the top supplier of LNG to Europe, where demand soared following Moscow's decision to largely cut off piped gas supply.
Both the U.S. Federal Energy Regulatory Commission (FERC) and the Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) need to approve Freeport's return to service.
Many analysts do not expect the plant to return until the first or second quarter because the company still has a lot of work to do to satisfy regulators.
Recommended Reading
Seatrium Awarded Contract for FPSO Bound for Guyana’s Stabroek
2024-05-17 - The topsides fabrication and integration contract will be for the FPSO Jaguar, bound for the Whiptail Field in the Stabroek block offshore Guyana for Exxon Mobil.
Third Suriname Find for Petronas, Exxon Could Support 100,000 bbl/d FPSO
2024-05-17 - A recent find offshore Suriname in Block 52 by Petronas and Exxon Mobil could support a 100,000 bbl/d FPSO development, according to Wood Mackenzie.
US Drillers Add Oil, Gas Rigs for First Time in Four Weeks: Baker Hughes
2024-05-17 - The oil and gas rig count rose by one to 604 in the week to May 17.
BPX Looks to Ramp US Production Over 60% by 2030
2024-05-16 - BPX Energy is looking to boost its U.S. production over 60% by 2030 as it considers bringing online a fourth processing facility in the Permian by mid-year 2025, Clark Edwards, the company’s vice president of development, said during SUPER DUG in Fort Worth.
Empire Petroleum’s Williston Drilling Program Identifies New Zones
2024-05-16 - Empire Petroleum provided updates on its Williston Basin development drilling program in its first quarter 2024 earnings results.