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US LNG WEEKLY: Freeport LNG begins first major scheduled maintenance on Train 1

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US LNG WEEKLY: Freeport LNG begins first major scheduled maintenance on Train 1

Highlights

Turnaround expected to last 18 days: operator

FOB Gulf Coast cargo values fall week on week

  • Author
  • Harry Weber    Kelsey Hallahan
  • Editor
  • Derek Sands
  • Commodity
  • Energy Transition LNG Natural Gas

Freeport LNG shut down one of its three liquefaction trains April 5 for scheduled maintenance as US FOB Gulf Coast cargo values fell during the latest week, and for the third day in a row.

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The turnaround, the first major scheduled work on Train 1 at the 15 million mt/year capacity Texas export facility, was expected to last 18 days, spokesperson Heather Browne said in an email response to S&P Global Commodity Insights. The terminal began operations in 2019.

The timeframe provided by the operator would put the end of the work on April 22; an air emissions notice to state regulators said the event that necessitated the notice would last until April 21.

"The outage will involve depressurization, purging, inerting, and dry-out of equipment components as required for maintenance activities and will result in unavoidable venting to the liquefaction flare," the notice to the Texas Commission on Environmental Quality said.

Browne noted that such maintenance activities are "standard practice for all LNG facilities."

According to nominations for the morning cycle, feedgas deliveries to Freeport LNG totaled 1.4 Bcf/d on April 5, down about 455 MMcf/d from the previous day. Total US feedgas demand stood at 11.7 Bcf/d, versus 12.1 Bcf/d the day before.

Platts assessed the Gulf Coast Marker for FOB cargoes loading 30-60 days forward at $29.50/MMBtu April 5, $1.95/MMBtu lower week on week, with Europe remaining as the best netback, according to S&P Global Commodity Insights. Volatility continued, with FOB cargo values having risen the week before, after falling the previous two weeks.

Since Cheniere Energy became the first US LNG exporter to operate from the Lower 48 states when it began production Dec. 30, 2015, the US has become a significant participant in the global marketplace. Forecasts suggest the US will become the world's biggest LNG exporter on an annualized basis this year.

Cheniere operates Sabine Pass Liquefaction in Louisiana and Corpus Christi Liquefaction in Texas, Sempra Energy operates Cameron LNG in Louisiana, Berkshire Hathaway operates Cove Point Liquefaction in Maryland and Kinder Morgan operates Elba Liquefaction in Georgia. The newest US LNG export terminal, Venture Global LNG's Calcasieu Pass in Louisiana, shipped its first cargo March 1.

Despite the strong demand for US sourced LNG, the seven major US facilities nominated 4% less feedgas with 12.6 Bcf/d on average in the week ended April 5, after registering an average of 13 Bcf/d in the previous week, S&P Global Commodity Insights data showed.

NYMEX Henry Hub May soared 44 cents to trade around $6.15/MMBtu on April 5, surpassing the $6/MMBtu mark for the first time since late January, amid market expectations that a recent cold snap will lead to a net withdrawal from US gas storage for the week ending April 1, after a false start for injection season during the previous week. US natural gas storage was observed at a 14.7% deficit to the five-year average as of the most recent weekly natural gas storage report from the US Energy Information Administration on March 31.