Freeport LNG liquefaction unit resumes production after maintenance completed

Freeport LNG returned a liquefaction unit to service Sept. 3 that had been undergoing maintenance, raising feedgas demand at the Texas facility.

The ramp-up came as Asian spot prices surged to near $20/MMBtu, on strong global demand that has been driving higher netbacks for US supplies.

The work began on one of the three units at the export facility south of Houston on Aug. 31. The operator has declined to say which unit was involved or whether the maintenance was planned or unplanned. A spokeswoman confirmed in an e-mail that the work was completed.

With the train coming back online, feedgas deliveries to Freeport LNG rebounded to just over 2 Bcf/d on Sept. 3, the same level of utilization during the week prior to the maintenance. Feedgas demand at the facility had fallen to the lowest level since June 14 on the day the work began, S&P Global Platts Analytics data show.

Based on nominations for the morning cycle, feedgas deliveries to all six major US LNG export terminals totaled 10.83 Bcf/d on Sept. 3, up about 450 MMcf/d from the day before and down only about 90 MMcf/d from a week earlier, Platts Analytics data show.

Freeport LNG is the only liquefaction terminal in the US and one of only a few in the world that uses exclusively electric motors instead of natural gas turbines to drive the liquefaction compressors. In addition to the three trains currently operating, it has proposed adding a fourth, though it has yet to sanction construction while it continues to build commercial support.

The Platts JKM for October was assessed at $19.750/MMBtu Sept. 3. The benchmark for spot LNG delivered to Northeast Asia has benefited from bullish demand sentiment. That has translated into high utilization at US liquefaction terminals, except for periodic blips due to weather, maintenance or operational adjustments.

Demand from China, South Korea and India continue to draw spot supplies into the region, Platts Analytics data show. Warmer-than-normal weather across the region has helped to keep downstream demand in the region elevated, pushing storage procurement plans further down the line before heading into the winter.

Even with the Asian demand, Brazil was the top destination for US LNG cargoes in August, amid persistent constraints at the Panama Canal. Delays have led to longer voyages for some Asia-bound cargoes. China and South Korea were tied for No. 2 in August.

The volume of US LNG on water at the end of August was nearly double the volume on water at the same point in 2020, Platts Analytics data show.