Thursday, May 29, 2025

Latest

Freeport LNG Export Terminal, Shuttered Since a June Fire, Should Restart Next Month

On November 18, Freeport LNG Development, L.P. announced that it plans an initial restart of its natural gas liquefaction and liquefied natural gas (LNG) export facility in mid-December 2022, about a month later than the company’s prior guidance. The Freeport facility, which is located on Quintana Island on Texas’ Gulf Coast and has a maximum production capacity of 2.38 billion cubic feet per day (Bcf/d), is expected to achieve a 2 Bcf/d production level in January 2023. The plant should reach full production in March 2023.

Freeport is a private company which is majority-owned by its CEO Michael Smith. Others which own major stakes include Dow Chemical and Japan’s Osaka Gas. The plant is the second largest liquefaction facility in the U.S. and the seventh largest in the world. It represents about 20% of the total U.S. LNG export capacity.

In early June 2022, an explosion occurred near the storage tanks at the Freeport LNG facility, and the severity of the fire damage forced the plant to shut down. Reconstruction work is now about 90% complete. Resumption of service at Freeport could boost U.S. natural gas prices as substantial incremental natural gas will be liquefied and ultimately exported to Asia and Europe where there is seemingly unlimited demand for LNG given Russia’s action to shut off the flow of conventional natural gas.

Natural gas is currently trading at around US$33 per thousand cubic feet (Mcf) at the benchmark Dutch Title Transfer Facility (TTF) in Europe, and at about US$26 per Mcf at the Japan Korea Marker in Asia. These prices dwarf the U.S. benchmark price of about US$6.64 per Mcf, and the huge gap between foreign and U.S. prices suggests that every U.S. gas molecule which can be liquefied and shipped overseas will be. Interestingly, the US$33/Mcf is holding even though gas storage facilities are reportedly 95% full, on average in Europe, and 100% full in Germany (per Trading Economics).

As an illustration of this, two LNG export vessels have been idling outside the Freeport facility awaiting its restart for the last three weeks or so. (Such patience, of course, speaks to the potential profitability of loading there and unloading in Europe.) A third vessel is reportedly crossing the Atlantic Ocean to get in the Freeport loading queue.  

A bit of a head-scratcher in the LNG world, given this huge price differential, is the scheduled arrival in the next few days of an LNG tanker from Trinidad at the Everett LNG import (receiving) terminal in Boston, Massachusetts. The Everett LNG facility has not received a cargo since August 2022. It has received 16.7 Bcf of gas in the form of LNG in the first ten months of 2022, (not surprisingly) only about half the quantity it received on average over the five-year period 2017-2021.

The most likely — and unfortunate, at least for consumers — consequence of all this: Freeport’s restart could cause U.S. natural gas prices to increase. In addition, Europe’s extraordinarily high prices seem set to persist for some time.


Information for this briefing was found via Trading Economics, Bloomberg and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply

Video Articles

How To Profit From $3300 Gold? An Inside Look At A Massive 300,000 Oz Project | Martino De Ciccio

We’re At The Start of a Great Silver Boom | Ross McElroy & Andy Bowering – Apollo Silver Corp

Equinox Gold Q1 Earnings: When Everything Goes Wrong

Recommended

Sterling Metals Hits 0.21% Copper Over 482.8 Metres In First Drilling At Soo Copper project

First Majestic Makes Second Major Discovery At Santa Elena In Just A Year

Related News

NG Energy: Revenue Generation To Begin By April – The Daily Dive feat Serafino Iacono

Today on the Daily Dive, we sit down with seasoned executive Serafino Iacono, whom is...

Wednesday, February 24, 2021, 01:30:00 PM

NG Energy Announces Updated Contingent and Prospective Resources

This afternoon NG Energy (TSXV: GASX) released an updated estimate for their flagship project Sinu-9...

Friday, March 19, 2021, 09:17:00 AM

NG Energy Announces Re-Entry Of Istanbul-1 Well Slated To Occur This Month

NG Energy (TSXV: GASX) continues to develop its natural gas project in Colombia. The company...

Thursday, February 11, 2021, 08:59:04 AM

Natural Gas Is The Transition Fuel Of The Future – The Daily Dive feat Ronald Pantin of NG Energy

Starting off the week on the Daily Dive is that of Ronald Pantin, whom is...

Monday, January 11, 2021, 01:30:00 PM

Switzerland’s Proposed Gas Rationing Rules Will Fine, Jail Violators

Panic is beginning to set in over Europe’s worsening energy crisis, forcing countries to ration...

Thursday, September 8, 2022, 12:33:00 PM