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Freeport LNG confirms Train 1 start seen in September 2019, cites flooding of yards

Highlights

Freeport LNG has confirmed that its engineering, procurement and construction contractor has pushed back the expected commercial start date for the export terminal’s first train to September 1, 2019, a roughly nine-month delay from a previously released target of fourth-quarter 2018.

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The change in schedule stems from a combination of flooding following Hurricane Harvey of lay-yards where equipment, including steel piping, was stored, as well as contractor execution delays, said John Tobola, senior vice president of Freeport LNG, in an April 18 interview with S&P Global Platts.

He said it takes time to analyze the schedule and determine where the cause of the delay lies, with the contractor or some other event.

Under the revised schedule the contractor presented, Train 2 is targeted to enter commercial service January 1, 2020, and Train 3 May 1, 2020.



The new timeline is expected to trim Texas LNG feedgas demand by roughly 0.9 Bcf/d in 2019 and 0.3 Bcf/d in 2020, according to S&P Global Platts Analytics. The most notable impact would be during the second half of 2019, when expected feedgas demand would be reduced roughly 1.2 Bcf/d, Platts data showed.

Nameplate capacity of each train at Freeport LNG is 5 million mt/year (equivalent to 670 MMcf/d), putting the full three-train facility at 15 million mt/year, or roughly 2 Bcf/d. According to technical specifications reported to the US Federal Energy Regulatory Commission, Freeport LNG has a peak liquefaction capacity of 5.3 million mt/year (or 700 MMcf/d) per train.

The engineering procurement and construction contractor is a consortium of CB&I, Zachry Group and Chiyoda. CB&I, the lead contractor, was not immediately available for comment.

The contractor’s lay-yards held structural steel, pipes and other equipment, in Brazoria County, an area of extensive flooding. In addition, one of the pipe manufacturers in Beaumont suffered substantial damage, said Freeport LNG spokesman Zdenek Gerych.

"It was a lengthy process to just to clean everything from the mud and then inspect it," Gerych said of the aftermath of the flooding of the lay yards. There was a need to inspect steel and equipment, including with x-rays, to ensure the surface of the metal didn't pit or that other qualities were not affected, he said.

Gerych emphasized that the Freeport construction sites, built up on higher ground, were unaffected by the flooding, as water was pumped out within days.

In May 2017, Freeport filed a variance request with FERC indicating that, due to delays in fabrication and delivery of materials to site, the EPC contractor was looking at potential nine- to 12-month delays.

The roughly $13 billion Freeport liquefaction and export terminal is being built on Quintana Island along the Texas Gulf Coast.

(Updates with company comment)

--Maya Weber, maya.weber@spglobal.com

--Ross Wyeno, rwyeno@spglobal.com

--Edited by Valarie Jackson, valarie.jackson@spglobal.com