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Freeport LNG completes flare line fix, keeps 1st cargo schedule afloat

Freeport LNG Development LP finished repairs Aug. 9 to a flare vent line that leaked gas as the export facility prepared to begin production of its first LNG cargo.

In a filing with U.S. regulators, Freeport sought approval of supplementary information regarding a design change associated with the line.

While no feedgas was observed to be flowing to the facility south of Houston on Aug. 9, and natural gas liquefaction had not officially begun, spokeswoman Heather Browne said Freeport LNG was sticking to its previous schedule for the first cargo.

"Repairs related to the gas leak have delayed our cool-down procedures," Browne said in an email. "However, we still anticipate first cargo around the middle of this month."

In a follow-up email, she said repairs were complete and Freeport LNG was awaiting a response from the Federal Energy Regulatory Commission.

The leak occurred shortly before 5:30 p.m. CT on Aug. 1 during the startup and cooldown of train 1 as feedgas was being vented to the flare. No injuries were reported.

In an Aug. 9 letter to FERC, Freeport LNG said it was submitting supplemental information regarding a design change associated with the 2-inch-diameter flare bypass vent line in train 1. It was seeking approval of the filing as soon as possible. Details were filed under seal.

The facility has experienced construction- and weather-related delays, most notably following heavy rain in the aftermath of Hurricane Harvey in August 2017. Once in operation, it will be the sixth major U.S. LNG export terminal to begin liquefying and exporting LNG since 2016. Four have regularly exported cargoes, while the fifth, Kinder Morgan Inc.'s Elba Liquefaction in Georgia, continued Aug. 9 to produce LNG that will become its first cargo.

The primary long-term buyers of off-take from Freeport LNG train 1 are Japanese utilities Osaka Gas Co. Ltd. and Chubu Electric Power Co. Inc., which each control 2.2 million tonnes per annum of capacity. Additional long-term contracts were signed with BP Energy Co. Inc. for 4.4 mtpa of off-take capacity on train 2 and with France's Total SA and South Korea's SK E&S LNG LLC, which are splitting another 4.4 mtpa of off-take capacity on train 3.

In total, long-term contracts cover roughly 13.2 mtpa of the proposed three-train, 15 million-mtpa facility's output, with additional short-term contracts, including a three-year deal with commodity trader Trafigura, covering the remaining supply.

In addition, Freeport LNG has secured another 2.2 mtpa long-term heads of agreement with Japan's Sumitomo Corp. for capacity on a proposed train 4, although Freeport LNG has yet to make a final investment decision on the expansion.

Harry Weber and Ross Wyneo are reporters with S&P Global Platts. S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.