Freeport LNG Feedgas Rebounds After Train 1 Shutdown

Natural gas deliveries to Freeport LNG increased after a compressor issue shut one liquefaction train, offering an early sign of recovery at one of the world's largest LNG export facilities.

(Reuters) — Freeport LNG's export plant in Texas was on track to take in more natural gas on July 24 after one of three liquefaction trains shut on July 23, according to a company report and data from financial firm LSEG.

Freeport is one of the world's most closely watched liquefied natural gas export plants because the shutdown and startup of the facility previously caused massive price swings in global gas markets.

When Freeport shuts, U.S. gas prices usually drop because the plant's demand for the fuel declines, and when liquefaction trains at Freeport restart, U.S. gas prices typically rise as demand for the fuel increases.

That is what happened so far on July 24 with U.S. gas futures NGc1 trading up around 1% due in part to the increased feedgas to Freeport.

Freeport told Texas environmental regulators on July 24 that Train 1 shut on July 23 due to an issue with a compressor system.

LSEG data showed that gas flows to Freeport were on track to rise to 1.3 billion cubic feet per day on July 24, up from 0.9 billion cubic feet per day on July 23. Since July 10, Freeport had been pulling in an average of just 1.0 billion cubic feet per day of gas during maintenance work expected to last until late August.

The three liquefaction trains at Freeport are capable of turning about 2.4 billion cubic feet per day of gas into LNG.

One billion cubic feet of gas is enough to supply about 5 million U.S. homes for a day.