February 4, 2023

2 December (Reuters) – Freeport LNG on Friday again postponed the restart of the US’s second-largest liquefied natural gas (LNG) export facility, pushing back its forecast for processing to resume until the end of the year pending regulatory approval.

Freeport LNG closed its Texas facility June 8 after an explosion and fire that energy consultants said were due to inadequate operating and testing procedures, human error and fatigue.

Last month the tightly held company said it was on track to restart the plant in mid-December and regain most of its annual output of 15 million tonnes by January, with a return to full operations in March.

“Based on current progress and assuming we continue to meet the necessary regulatory requirements, we now expect the restart of our liquefaction facility to be completed towards the end of the year,” Heather Browne, spokeswoman for Freeport LNG, told Reuters in a statement E-mail.

Delaying the plant’s restart would leave less fuel available to European countries trying to replace Russian gas. Russia has cut exports to European Union buyers in response to sanctions against Moscow over its invasion of Ukraine.

Any restart must be approved by the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA), which has yet to sign off on a full repair plan.

Freeport LNG’s official cleanup work plan remains “a work in progress,” and the company has not yet filed an application to resume normal operations, PHMSA said. The supervisory authority could not estimate how long an examination of the application would take.

Analysts have said it could take until January or February for PHMSA to review and approve a restart request and for Freeport to complete the necessary work.

Alex Munton, a director at energy consultancy Rapidan Energy Group, said a restart of gas processing at Freeport is unlikely to happen until the first quarter of next year, “although longer delays are possible.”

The company missed its target several times. In June, a restart was predicted in October, followed by November, followed by mid-December and now late December.

The shutdown has forced big customers like JERA and Osaka Gas (9532.T) to post hundreds of millions of dollars in losses because they had to buy expensive LNG elsewhere to supply their customers.

Other Freeport LNG customers include BP (BP.L), TotalEnergies (TTEF.PA) and SK E&S.

Reporting by Kavya Guduru in Bengaluru and Scott DiSavino in New York Editing by Marguerita Choy

Our standards: The Thomson Reuters Trust Principles.

Scott Disavino

Thomson Reuters

Covers the North American power and natural gas markets.

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