Freeport LNG seeks US FERC approval for facility piping cooldown in 'initial step' toward restart

Freeport LNG asked the US Federal Energy Regulatory Commission to authorize it to introduce LNG into a piping system at the facility as "its initial step to resuming normal operations at the export facility."

The operator, in a Jan. 23 filing that also sought approval to reinstate the management of boil-off gas, asked FERC to approve the request by Jan. 24. The request did not go as far as to ask the regulator to return liquefaction trains to operation, which would come in a separate request.

But Freeport Jan. 23 maintained its goal of resuming production in January despite growing anticipation among market participants that the operator faces further delays. The export terminal has been offline since a fire at the facility June 8.

"We are progressing toward the initial, safe restart or our liquefaction facility, still targeted for the second half of this month, pending regulatory approvals," Freeport spokesperson Heather Browne said in an email.

Freeport's filing at FERC outlined steps by the operator to prepare for returning the facility to operations.

"Freeport has completed repairs to the export facility on Quintana Island, Texas, performed safety reviews, revised various procedures, implemented new safety systems and performed necessary training in order to safely begin to resume initial operations at its export facility," Freeport said in the filing.

The cool down of Freeport's "Loop 1 LNG transfer piping" involves "the slow and deliberate introduction of LNG into the piping system to allow the piping to cool down to cryogenic temperatures necessary for circulation of LNG," according to the filing.

The lengthy delay in Freeport LNG's restart has helped keep LNG prices in Europe from further cratering amid an oversupplied market.

High gas stocks and relatively mild winter weather have helped push European LNG prices down sharply from record highs last summer. A near-term restart at Freeport LNG could be even more bearish for the Atlantic LNG market, according to traders.

Freeport LNG has already been heard to have canceled some cargoes for early February loading. Some market participants don't expect production in earnest until late February or March.

Platts DES Northwest Europe for March was assessed at $17.956/MMBtu Jan. 23. The Dutch TTF March contract was assessed at $20.406/MMBtu. NWE was assessed at a $2.450/MMBtu discount to TTF front-month, versus a $2.80/MMBtu discount the day before. The Platts Gulf Coast Marker for FOB USGC cargoes loading 30 to 60 days forward was assessed at $16.600/MMBtu Jan. 23.