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Freeport LNG ramps back up after latest power-related outage at US terminal

Highlights

Feb. 23 utilization well below pre-disruption level

FOB Gulf Coast cargo values rise to seven-week high

Freeport LNG appeared to still be ramping back up Feb. 23 after utilization fell sharply when all three liquefaction trains at the Texas export facility tripped offline earlier in the week because of a power disruption.

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The terminal about 50 miles south of Houston is the only US LNG export facility that uses electric motors exclusively instead of natural gas turbines to drive the liquefaction compressors on its trains. Because of that, Freeport LNG suffers periodic outages when there is a power surge or disruption.

The latest episode occurred Feb. 20 when the facility experienced a trip of liquefaction trains 1, 2 and 3 that was caused by an interruption in power, according to an air emissions notice filed with state regulators Feb. 21.

"This resulted in the unavoidable venting from the three liquefaction trains to the Liquefaction Flare," the notice said. "Because of the trip at Pretreatment Facility, outgoing boil off gas from the liquefaction facility had to be rerouted to the terminal Z4 flare until such time as the Pretreatment Facility regained power and resumed the use of BOG for fuel gas."

A terminal spokeswoman declined to comment on Freeport LNG operations.

Feedgas deliveries to Freeport LNG fell to around 846 MMcf/d Feb. 20, and then further to around 122 MMcf/d Feb. 22, based on nominations for the morning cycle, S&P Global Platts Analytics data showed. On Feb. 23, the terminal had yet to return to full utilization, with the level of feedgas deliveries at about one-quarter the level before the disruption -- 567 MMcf/d versus 2.1 Bcf/d.

Demand for US LNG cargoes in Europe and Asia has surged over the last year, with liquefaction facilities regularly operating at or near full capacity. Total US LNG feedgas demand stood at around 11.3 Bcf/d on Feb. 23, up 1 Bcf/d from Feb. 22, Platts Analytics data showed.

Platts assessed the Gulf Coast Marker at $27.350/MMBtu Feb. 23, up $3.05/MMBtu on the day, as the value of US FOB cargoes loading 30 to 60 days forward tracked the rise in European LNG prices. GCM's current value is almost six times higher than it was a year earlier.

While Cheniere Energy prepared to release financial results for the final three months of 2021, the market continued to await the first LNG shipment from Venture Global LNG's Calcasieu Pass in Louisiana. As of Feb. 23, a JERA-controlled tanker had been at the facility for 16 days.