Natural Gas Prices Tumble On Freeport LNG Rumors
By ZeroHedge - Nov 15, 2022, 9:00 AM CST
Freeport LNG reportedly told customers that its Texas terminal reopening could be delayed further.
People with direct knowledge of the situation said LNG shipments for November and December are likely to be canceled as maintenance work continues.
Freeport LNG rejected claims made on social media last Friday that its terminal would be closed for an extended period.
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Now Bloomberg reports Freeport LNG told customers that outages at its Texas terminal, which has been closed since June and was scheduled to reopen by mid-November, could be delayed further. People with direct knowledge of the situation said LNG shipments for November and December are likely to be canceled as maintenance work continues on the liquefaction plant. Also, regulatory approvals could prolong the start date.
This comes as heating demand is set to surge across the Northern Hemisphere. The LNG export facility in Freeport, Texas, accounted for 15% of all US LNG exports, most of which were sent to Europe.
Freeport said last week it was set to resume operations this month, though reliable timelines from the company have been hard to get, according to the people.
Last Friday, US natural gas prices plunged after rumors circulated on social media about possible restart delays at Freeport. Then the company denied Twitter rumors late Friday which sent US Natgas prices higher early Monday to only plunge again, with now Bloomberg reporting possible restart delays.
This is more bad news for Europe as the energy-stricken continent has to search elsewhere for LNG shipments. On the flip side, more NatGas will be injected into US storage ahead of winter.
Freeport LNG, a major liquefied natural gas exporter in Texas, rejected claims made on social media last Friday that its terminal would be closed for an extended period.
US natural gas futures plunged as much as 7.4% on Friday as someone operating a Twitter account, identifying as a trader, said "cracked pipes" were discovered at the terminal, potentially delaying the company's plans to restart exports by mid-month. The tweet was immediately deleted.
"That speculation ratcheted up sharply Friday morning, when a Twitter account, @Lithium_Plays, made several unconfirmed statements regarding Freeport that were widely shared by other Twitter accounts, including a top, so-called energy Twitter influencer, an oil analyst for a major international bank whose account has 64,000 followers. But those tweets by @Lithium_Plays were then quickly deleted.
Shortly thereafter, another account, @rr9b250, Tweeted a screenshot that seemed to look like it came directly from Freeport LNG, as it was on Freeport LNG letterhead with the same logo colors that one sees on Freeport's official website. The statement ended with "Sincerely, Freeport LNG Public Relations."" --Market Watch
After US NatGas futures settled, Freeport released a statement Friday evening, rejecting such claims calling it fake news:
"Any Tweets and/or posts on Freeport LNG branded letterhead that may have been obtained or published, are reporting false information and are not legitimate, official public information from Freeport LNG," the company said in a statement.
On Monday morning, US natural gas futures jumped more than 5.5% to as high as $6.25/mmbtu on Freeport dismissing reopening claims.
By Zerohedge.com
Freeport LNG
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Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Freeport LNG
Freeport LNG targets mid-December restart for Texas export plant
Nov 18 (Reuters) - U.S. liquefied natural gas company Freeport LNG said it was targeting a mid-December restart for its Texas export plant, which has been shut for six months after a fire.
Freeport, the second-biggest U.S. LNG export facility, closed in June after an explosion that energy consultants said was the result of numerous factors including human error and inadequate operating and testing procedures.
U.S. LNG exports have been steadily increasing for years, and that supply has become crucial to European buyers since Russia cut off the continent's natural gas supply in response to sanctions placed on Moscow after its invasion of Ukraine.
Freeport said in a release that it expects to be turning about 2 billion cubic feet per day (bcfd) of gas into LNG in January 2023 and reach full production using both docks in March 2023.
The United States is currently turning about 12 bcfd of gas into LNG, according to data from Refinitiv.
Federal pipeline safety regulators released a heavily redacted consultant's report this week that blamed inadequate operating and testing procedures, human error and fatigue for the June 8 explosion.
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Officials at the U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) were not immediately available for comment.
Freeport said it submitted proposed remedial work activities for a safe restart of initial operations for their approval.
Until late last week, Freeport LNG had said repeatedly the plant remained on track to return to service in November.
DECEMBER RESTART
But many analysts said earlier this week that the plant could not restart until December or later because the company had not yet submitted its restart plan to federal regulators.
The Freeport shutdown has forced customers to buy expensive LNG from other sources to supply their own customers.
One Freeport customer, JERA, Japan's biggest LNG buyer, said in late October it plans to book a 110 billion yen ($751 million) loss related to the Freeport shutdown, mostly due to higher costs to buy alternative fuel from the spot market.
Another Freeport customer, Osaka Gas(9532.T), said it also suffered a financial impact from the Freeport outage.
In August, LNG prices hit record highs of more than $90 per million British thermal units (mmBtu) at the Dutch Title Transfer Facility (TTF) in Europe and nearly $70 at the Japan Korea Marker (JKM) in Asia .
That compares with an average of around $7 per mmBtu so far this year at the U.S. Henry Hub gas benchmark in Louisiana.
Freeport's other customers include units of Osaka Gas (9532.T), BP (BP.L), TotalEnergies (TTEF.PA) and SK E&S. JERA is an alliance between units of Tokyo Electric Power Co Holdings (9501.T) and Chubu Electric Power Co (9502.T).
Since Freeport will not restart in November, a couple of LNG vessels that were either heading for Freeport, such as LNG Rosenrot, or had waited outside the plant, such as Prism Brilliance, have moved on to other ports.
LNG Rosenrot is now headed for Gibraltar, while Prism Brilliance is sitting outside Corpus Christi in Texas where another U.S. LNG company, Cheniere Energy Inc (LNG.A), has an LNG export plant, ship tracking data from Refinitiv showed.
Nov 18 (Reuters) - U.S. liquefied natural gas company Freeport LNG said it was targeting a mid-December restart for its Texas export plant, which has been shut for six months after a fire.
Freeport, the second-biggest U.S. LNG export facility, closed in June after an explosion that energy consultants said was the result of numerous factors including human error and inadequate operating and testing procedures.
U.S. LNG exports have been steadily increasing for years, and that supply has become crucial to European buyers since Russia cut off the continent's natural gas supply in response to sanctions placed on Moscow after its invasion of Ukraine.
Freeport said in a release that it expects to be turning about 2 billion cubic feet per day (bcfd) of gas into LNG in January 2023 and reach full production using both docks in March 2023.
The United States is currently turning about 12 bcfd of gas into LNG, according to data from Refinitiv.
Federal pipeline safety regulators released a heavily redacted consultant's report this week that blamed inadequate operating and testing procedures, human error and fatigue for the June 8 explosion.
Latest Updates
Officials at the U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) were not immediately available for comment.
Freeport said it submitted proposed remedial work activities for a safe restart of initial operations for their approval.
Until late last week, Freeport LNG had said repeatedly the plant remained on track to return to service in November.
DECEMBER RESTART
But many analysts said earlier this week that the plant could not restart until December or later because the company had not yet submitted its restart plan to federal regulators.
The Freeport shutdown has forced customers to buy expensive LNG from other sources to supply their own customers.
One Freeport customer, JERA, Japan's biggest LNG buyer, said in late October it plans to book a 110 billion yen ($751 million) loss related to the Freeport shutdown, mostly due to higher costs to buy alternative fuel from the spot market.
Another Freeport customer, Osaka Gas(9532.T), said it also suffered a financial impact from the Freeport outage.
In August, LNG prices hit record highs of more than $90 per million British thermal units (mmBtu) at the Dutch Title Transfer Facility (TTF) in Europe and nearly $70 at the Japan Korea Marker (JKM) in Asia .
That compares with an average of around $7 per mmBtu so far this year at the U.S. Henry Hub gas benchmark in Louisiana.
Freeport's other customers include units of Osaka Gas (9532.T), BP (BP.L), TotalEnergies (TTEF.PA) and SK E&S. JERA is an alliance between units of Tokyo Electric Power Co Holdings (9501.T) and Chubu Electric Power Co (9502.T).
Since Freeport will not restart in November, a couple of LNG vessels that were either heading for Freeport, such as LNG Rosenrot, or had waited outside the plant, such as Prism Brilliance, have moved on to other ports.
LNG Rosenrot is now headed for Gibraltar, while Prism Brilliance is sitting outside Corpus Christi in Texas where another U.S. LNG company, Cheniere Energy Inc (LNG.A), has an LNG export plant, ship tracking data from Refinitiv showed.