Freeport, Texas LNG plant still draws natgas to generate electricity

A liquefied natural gas (LNG) tanker is pulled towards a thermal power plant in Futtsu, east of Tokyo, Japan November 13, 2017. REUTERS/Issei Kato

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Aug 11 (Reuters) – U.S. liquefied natural gas (LNG) company Freeport LNG said on Thursday it was still taking small amounts of natural gas from pipelines at its closed LNG export plant in Texas to supply a power plant .

The company said it expects the liquefaction plant, which closed due to a fire on June 8, to return to service at least partially in early October. Read more

U.S. gas futures jumped about 8% on Thursday on higher gas flows to the Freeport LNG plant, lower gas production and forecasts of fuel demand over the next two weeks than expected.

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Freeport LNG began pulling small amounts of pipeline to supply a power plant that sold electricity to the Texas grid in mid-July. Read more

Meanwhile, Freeport LNG has reversed the force majeure it originally declared after the June explosion, a development that could cost its buyers billions of dollars in losses. Read more

“Freeport LNG currently draws a small amount of gas from pipeline connections…to power a gas turbine generator at its natural gas pre-processing facility to generate and export approximately 50 (megawatts) of electricity to the power grid of the state,” Freeport LNG spokeswoman Heather Browne said in an email.

Data provider Refinitiv said about 22 million cubic feet per day (mmcfd) of gas was delivered to the plant from July 19 through the start of this week.

That compares to an average of 2.0 billion cubic feet per day (bcfd) in the month before the plant closed.

The gas markets in the United States and Europe swung sharply on developments at the Freeport LNG plant. Prices in Europe jumped about 40% in the week after the plant closed, as the world was already running out of gas due to Russia’s invasion of Ukraine in February. Read more

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Reporting by Scott DiSavino; edited by Jonathan Oatis and Paul Simao

Our standards: The Thomson Reuters Trust Principles.

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