Freeport LNG plant in Texas will remain closed until the power supply stabilises
Freeport LNG, a U.S. company that exports liquefied gas, said Wednesday it had closed its Texas plant on Jan. 21, due to an electrical problem caused by a winter storm. It will remain shut until the power supply is stabilized.
Freeport LNG informed in an email that "Freeport LNG’s liquefaction operations have been shut down due to CenterPoint Energy power outages beginning early on Tuesday morning."
The company added, "Our liquefaction operations will be offline until the power transmission conditions improve."
CenterPoint Energy officials in the United States were not immediately available to comment.
CenterPoint released a statement on Tuesday stating that more than 99.9% customers in the Greater Houston Area still have power and that crews continue to respond to scattered outages.
PowerOutage.us tracks power outages and reported that there were approximately 16,000 homes or businesses without electricity in Texas on Wednesday at 8:17 am EST (1317 GMT), with about 3,700 of them in CenterPoint territory.
CenterPoint says it supplies power to 2.8 million Texas customers.
Freeport LNG has been one of the most closely monitored LNG export plants around the world. This is because its start-ups and stops often cause huge price swings on global gas markets.
Due in part to Freeport's outage, gas was trading at a high of 15 British thermal units per million British Thermal Units on the Dutch Title Transfer Facility benchmark in Europe.
Gas prices in the U.S. typically drop when flows to Freeport decrease due to a lower demand from the export plant for the fuel. Prices in Europe tend to increase because of a reduction in LNG supplies to global markets.
The financial firm LSEG reported that the amount of LNG flowing to eight large U.S. export plants had risen from 14.4 billion cubic feet daily in December to an average 15.0 bcfd so far in the month of January. This compares to a monthly high of 14.7 billion cubic feet per day in December 2023.
The Freeport outage was the main reason for the daily drop of 2.3 bcfd, which brought LNG feedgas to its lowest level in six weeks, at 13.3 bcfd.
According to LSEG, flows to Freeport are on track to reach 0.3 bcfd by Wednesday. They were near zero on Tuesday. This compares to an average of 1.9 billion cubic feet per day during the previous week.
A billion cubic feet of natural gas can supply five million U.S. households for one day. (Reporting from Scott DiSavino, New York; Ashitha Shivaprasad, Bengaluru. Editing by Louise Heavens and Jason Neely.
(source: Reuters)
