Freeport LNG shuts down as Hurricane Beryl hits Texas Gulf Coast

Freeport LNG production remained offline for a second consecutive day July 8 as Hurricane Beryl battered the Texas coast with powerful wind and heavy rain before weakening as it progressed inland, while operations at the country's six other major LNG export terminals appeared largely unaffected.

The operator of the Freeport facility on Quintana Island, south of Houston, said it shut down the facility July 7 in preparation for the arrival of the storm. The Freeport outage pushed total US LNG feedgas demand down to about 11.1 Bcf/d on July 8, from about 13.1 Bcf/d on July 6, S&P Global Commodity Insights data showed, based on nominations for the morning cycle that could later be revised.

"We safely ramped down production at our liquefaction facility on Sunday, July 7, ahead of Hurricane Beryl making landfall," Freeport spokesperson Heather Browne said in an email. "We intend to resume operations once it is safe to do so."

Hurricane Beryl made landfall as a Category 1 storm around 4 am local time July 8 near Matagorda, Texas, which is south of the Freeport plant, before weakening into a tropical storm hours later as it progressed inland to the north.

Feedgas flows to Freeport were near zero July 8. The operator said in filings with the state air regulator, the Texas Commission on Environmental Quality, that the plant's three liquefaction trains were "proactively shutdown" at about 7 am local time July 7.

Farther south of Matagorda, Cheniere's Corpus Christi LNG

remained in operation, while all non-essential personnel were released from work, Cheniere said July 8.

"The facility is secure, and LNG production continues uninterrupted," Cheniere said.

The operator said during the morning of July 8 that it was monitoring the storm's progress and had implemented its severe weather preparedness plans. Cheniere reported no operational disruptions to its flagship Sabine Pass LNG terminal, about 100 miles east of Houston in Cameron Parish, Louisiana.

The storm caused widespread outages in Texas. About 2.2 million customers of Freeport LNG's electricity provider CenterPoint Energy were without power by early afternoon July 8 across its service area, which includes Houston and Brazoria County, which is home to Freeport, according to PowerOutage.us.

Power outages can be an issue for Freeport LNG since it uses electric motors instead of natural gas turbines to drive the liquefaction compressors on its liquefaction trains, which have combined capacity of 15 million mt/year. The export facility requires 690 MW of electric power supply to operate the liquefaction trains, which is more than the surrounding Freeport area, according to the US Energy Information Administration.

Market participants anticipated a limited impact on US supply from the storm. An Atlantic basin LNG trader said July 8 that LNG prices had retreated after rising following forecasts of the storm hitting the Gulf Coast.

"We are not expecting much deviation from planned exports and deliveries except maybe some small delays," the trader said.

Hurricane researchers have forecast an extremely active Atlantic hurricane season, which normally lasts from the beginning of June to the end of November.

Platts, part of S&P Global Commodity Insights, assessed the Gulf Coast Marker for US FOB cargoes loading 30- to 60-days forward at $9.27/MMBtu July 8, down 23 cents/MMBtu on the day.