Planned inspections at US Freeport LNG Train 1, 2 may cut Osaka Gas' procurement: president

Planned inspections at US Freeport LNG's Train 1 and 2 may reduce procurement volumes for Osaka Gas, Osaka Gas President Masataka Fujiwara said March 27, as Train 3 at the export terminal in Texas resumes full operations.

"Train 3 had some troubles but they are resolved as well as it is at full operations," Fujiwara told a press briefing in Tokyo. "I am hearing that Train 1 and 2 will be suspended in order for inspection to avert similar troubles."

Asked to comment on any impact from planned inspections at the two trains at the Freeport LNG terminal, Fujiwara said: "We may see reduction in procurement from Freeport as a result of troubles."

Osaka Gas, however, is not overly concerned because it has secured some extra volumes in its LNG procurement, said Fujiwara, adding that it is facing "slight surplus" in its LNG following the warm winter.

In a March 19 interview, CEO Michael Smith said Train 3 was back online and should resume full production the night of March 20 or early March 21 after Freeport successfully repaired a problem with an electrical motor experienced during a winter storm in January.

After inspecting the remaining two electrical motors on the liquefaction unit and making repairs, Freeport decided that it would shut down Trains 1 and 2 for inspection and similar work, if needed, moving forward planned maintenance that had been scheduled in the coming years.

Osaka Gas has a 10.8% stake in Freeport LNG Development, operator of the Freeport LNG project, and lifts 2.32 million mt/year of LNG from Freeport LNG's Train 1.

On the long-term LNG contractual expiry, Fujiwara said the company plans to renew its long-term contracts expiring after 2030, as it expects LNG demand to be growing as a substituting transition fuel for phasing out coal-fired power plants in Japan.

"We basically intend to renew [the expiring contracts] in the next few years," he said, declining to elaborate on duration of the LNG contractual renewals.