US' Freeport seeks permission for commercial operations of remaining LNG train

Freeport LNG said it is ready to begin restart activities on the last remaining liquefaction train yet to receive regulatory approval to resume commercial operations, as the operator of the facility continues its work to ramp up to full production after returning from a lengthy outage.

The exporter told the US Federal Energy Regulatory Commission in a Feb. 27 filing that Liquefaction Train 3 has reached "full, commercial operations and production of LNG," while Train 2 "is safely continuing through its restart activities." Freeport said it is now ready to bring back the final unit, Train 1, and asked FERC for permission to resume commercial operations of the train once the restart activities are complete.

The three-train, 15 million mt/year capacity Freeport terminal was forced to shut down following an explosion and fire at the facility June 8, 2022, and the outage would become the biggest in US LNG history before Freeport resumed exports earlier this month. Freeport has said that the first LNG production and ship loading from the facility began Feb. 11, which was a day before the facility began exporting the first of several partial cargoes using LNG that was in storage before the outage began.

FERC approved the return to commercial operations of the previous two liquefaction trains at Freeport Feb. 21.

The facility had shipped six partial cargoes so far, and a seventh tanker was moored at the facility Feb. 27, S&P Global Commodity Insights data showed.

It was not clear how much LNG Freeport has produced since the restart. Freeport spokesperson Heather Browne declined to comment Feb. 27 beyond the filing.

But the Freeport terminal, which can take more than 2 Bcf/d of feedgas when it is operating fully, has shown an increase in feedgas deliveries over the past several days. The terminal was scheduled to receive more than 743 MMcf/d of feedgas Feb. 27, based on nominations for the morning cycle that could later be revised, S&P Global showed. Flows to Freeport have been at similar levels since Feb. 22, except for briefly dipping below 400 MMcf/d Feb. 25.

Freeport can export about 16-19 LNG cargoes per month when operating normally, according to figures collected from market sources. The terminal's long-term off-takers include BP, South Korea's SK Group, Japanese utilities JERA and Osaka Gas, and France's TotalEnergies.

Freeport's return to full operations is expected to ease tightness in the global gas market while cutting slack in the US gas market that is weighing on domestic prices.

The ramp-up underway comes at a time of depressed LNG prices, with healthy gas storage levels in Europe and relatively soft demand in Asia.

The Platts Gulf Coast Marker for US FOB cargoes loading 30-60 days forward was assessed at $11.60/MMBtu Feb. 27, down 85 cents from Feb. 24.

Across the Atlantic, Platts DES Northwest Europe for April was assessed at $12.864/MMBtu Feb. 27, down $1.011on the day to the lowest level since July 23, 2021, according to S&P Global Commodity Insights. The first half of April was assessed at $12.876/MMBtu and the second half of April was assessed at $12.851/MMBtu, reflecting a 2.5 cents/MMBtu backwardation intramonth structure. The April Dutch TTF contract was assessed at $14.676/MMBtu Feb. 27, down 94.9 cents on the day.