Oil prices are set to…
Rumors that China was going…
Freeport LNG has pushed back the date of its expected restart that it provided earlier in the month.
Freeport LNG has been shut since June, and shared earlier this month that it expected to complete the repairs in time to resume partial operations in early October. But now, Freeport LNG isn't expecting to resume partial operations until early to mid-November, reaching 2 billion cubic feet of gas production per day by the end of November, the company said in a Tuesday press release.
The 2 Bcf per day mark represents 85% of the facility's export capacity. The remaining production is expected to be reinstated by March 2023, "although typical construction risks could impact the recovery plan," the company said.
Houston-based Freeport LNG suffered an explosion on June 8, which caused the plant to shut down to assess the damage and perform repairs. Freeport LNG accounts for 20 percent of the United States' total LNG export capacity, capable of processing 2.1 billion cu ft of gas per day. According to Freeport LNG, it is the seventh-largest liquefaction facility in the world and the second-largest in the United States.
The months-long outage in the United States has restricted exports at a critical time for the EU, as the block tries to wean itself off Russian gas.
Freeport LNG declared force majeure back in June after the explosion, which was supposed to last until September. The company retracted the force majeure later in June, while the facilities remain shuttered. A force majeure declaration would provide cover for traders who default on their natural gas delivery commitments. Without it, those traders must find alternate supplies on the spot market—typically at much higher prices, resulting in significant losses.
Henry Hub gas futures were trading down after the announcement.
By Julianne Geiger for Oilprice.com
More Top Reads From Oilprice.com:
Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.