- Further approval is needed for the restart of commercial operations
- Market sources anticipate exports in February
- Freeport offline since June 8 fire
Freeport received permission to load LNG ships from the US Federal Energy Regulatory Commission Feb. 9, marking more commissioning progress for the exporter as it works to restart service at the Texas facility, reports SP Global.
Full commercial operations
A separate approval would be required to restart full commercial operations.
“This does not grant authorization to place the liquefaction trains including rundown piping to tanks, or other remaining facilities back into service,” FERC said. “Authorization will only be granted following the review of filed responses, a determination that the facilities are fit for service, and documentation that acceptable measures have been put into place to safely return the facilities to operation.”
FERC, in granting its approval for Freeport to load ships and return some facility piping to service, cited the “satisfactory progression of cooldown activities, including remedial actions taken during cooldown” as well as a review of a series of supplemental filings by Freeport at the agency since its Feb. 2 request for permission to load LNG ships. Freeport’s request, which did not lay out a potential timeline for loading an LNG tanker, had sought FERC’s approval by Feb. 3.
Market sources were expecting the Freeport’s first exports since the outage at the terminal to happen in the second half of February.
US gas market participants have been waiting for the return of Freeport—which can take about 2.1 Bcf/d of feedgas deliveries when operating fully—to offer some relief to a supply overhang that has weighed on domestic gas prices in recent weeks.
Globally, Freeport’s expected near-term resumption of shipments has continued to help drive bearish price sentiment in the LNG market. LNG prices have fallen significantly from 2022 levels but remain high relative to historical norms.
The Platts Gulf Coast Marker for US FOB cargoes loading 30-60 days forward was assessed at $13.25/MMBtu Feb. 9, up 10 cents from Feb. 8.
Necessary repairs and operational improvements
Freeport has reported completing the necessary repairs and operational improvements that are required for restart. But it remains unclear how long restart activities will take before Freeport is able to resume LNG exports.
Freeport spokesperson Heather Browne declined to comment Feb. 9 beyond the regulatory filings.
Flows to the terminal south of Houston have remained small, despite ticking up over the past week following FERC’s Feb. 1 approval for the operator to cool down Train 3 and resume the initial production of LNG.
Deliveries of feedgas to Freeport were on track to reach about 158 MMcf/d Feb. 9, based on nominations for the morning cycle that could later be revised, as overall US feedgas demand topped 13 Bcf/d, S&P Global Commodity Insights data showed.
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Source: SP Global