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Feedgas Volumes To U.S. Freeport LNG Plant Plunge

The volumes of feedgas into the major U.S. LNG export facility Freeport LNG plummeted this weekend, at a time when the global gas market could tighten ahead of the winter with a strike at Australian LNG plants and maintenance in Norway.

Feedgas flows to Freeport LNG plunged from 1,640 million cubic feet per day (mcf/day) on Friday, to 702.9 mcf/day on Saturday and further to 284.3 mcf/day on Sunday, according to data from LSEG cited by Reuters.

On Monday, feedgas flows to the second-largest U.S. LNG exporting plant, averaged around 622 mcf/d, per the data.

According to Leo Kabouche, LNG market analyst at consultancy Energy Aspects, the decline in feedgas over the weekend suggests that at least two Freeport LNG units, or trains, were not taking any gas.

Global demand for U.S. LNG has jumped since the Russian invasion of Ukraine and the Russian halt of pipeline gas deliveries to most of Europe.

Ahead of this winter, prices haven’t jumped too much thanks to high levels of gas in storage in Europe. But over the past weeks, the benchmark European gas prices were volatile amid strike threats in Australia.

While European buyers rarely import Australian LNG due to the long trip, Asia could see some of its Australian supply drop, intensifying competition with Europe for volumes from elsewhere.

On Monday, the front-month futures at the TTF hub, the benchmark for Europe’s gas trading, were up by 6.8% at $39.60 (36.85 euros) per megawatt-hour (MWh) as of 1:32 p.m., amid continued supply concerns.

Workers at Chevron’s LNG facilities Gorgon and Wheatstone began a strike on Friday after talks with the projects’ operator fell through. No deal is expected to be reached, Chevron Australia said on Monday, while workers at the local trade unions prepare for full-scale strikes.

In addition, outages in Norway – now Europe’s top gas supplier – due to regular maintenance also pushed gas prices higher on Monday.


By Charles Kennedy for Oilprice.com

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