Freeport LNG—the second largest liquefaction facility in the United States—is said to have returned to nearly full power on Friday after experiencing disruptions for the last week.
The last week saw Freeport LNG take in less feedgas than normal, averaging as little as 0.3 Bcf/d over the last few days, compared to 1.8 Bcf/d last week. Freeport LNG canceled cargoes as a result of the slowdown, which it declined to comment on to media.
Freeport LNG accounts for 20% of all US LNG imports.
Industry analysts suspected that two of Freeport’s three LNG trains had been idled but were rumored to have restarted on Thursday.
The gas markets were already on shaky ground prior to Freeport’s slowdown, with China’s gas consumption on the rise and showing renewed interest in the LNG spot market to beef up for winter. China has recently signed many long-term LNG supply deals—including with the United States.
Sinopec, in particular, was said to be looking for 13 LNG cargoes yet this year to start next month.
Meanwhile, the gas market in Europe remains volatile due to the extreme heat, gas plant maintenance, and Australia’s LNG strikes at Chevron’s Gorgon and Wheatstone facilities—although Europe did manage to reach and even surpass its target for filling its gas storage facilities to 90% capacity ahead of its deadline.
But a cold winter could collide with a potential full stop of the remaining Russian pipeline gas to Europe on October 1, when Ukraine’s supply contract with Gazprom is set to expire, the IEA predicted in its annual gas report published in July.
Freeport’s outage increased the risk in the gas markets, with analysts struggling to predict pricing moves and market balance.
So far, Chevron’s Gorgon and Wheatstone projects have continued to export LNG despite the strikes.
By Julianne Geiger for Oilprice.com
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