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Freeport LNG terminal could see first tanker arrive within days: cFlow

Highlights

Unladen LNG Jurojin appears headed to Texas port

Feedgas flowing again to terminal as production nears

Houston — An unladen LNG tanker appeared to be headed toward the Freeport, Texas, terminal as the liquefaction facility there prepared to produce and export its first cargo, data provided by S&P Global Platts' trade flow software, cFlow, showed Monday.

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The Mitsui- and Kansai Electric Power-owned LNG Jurojin listed a captain's destination of US FPO - an abbreviation for the port of Freeport -- with an estimated arrival of Thursday.

The tanker last dropped off a load of LNG at Japan's Ohgishima receiving terminal around July 19, after picking up a cargo at Nigeria's Bonny facility around June 20, cFlow data show. It passed through the Panama Canal on Friday and was heading north toward the Gulf of Mexico on Monday.

A Freeport LNG spokeswoman, Heather Browne, declined to confirm or comment on the tanker's plans, citing confidentiality.

As of early afternoon Monday, production at the export terminal south of Houston had yet to begin, though "work continues to progress," Browne said. Feedgas began flowing again to the facility over the weekend, after a brief lull due to repairs to a flare vent line that had encountered a gas leak during the startup and cool down process for Train 1.

Tankers can often change destinations or adjust the timing of arrival depending on market and customer needs. As Freeport LNG operates on a tolling model, buyers of the LNG produced there are responsible for the procurement and delivery of feedgas supply to the liquefaction facility, as well as arranging shipping and deciding where the cargoes are delivered.

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The Freeport LNG facility has experienced multiple 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 US LNG export terminal to begin liquefying and exporting LNG since 2016.

Four have been regularly exporting cargoes, while the fifth, Kinder Morgan's Elba Liquefaction in Georgia, continued Monday to produce its first cargo. As of Monday afternoon, there were no unladen LNG tankers listing a captain's destination of the port where Elba is located, cFlow showed.

The primary long-term buyers of offtake from Freeport LNG Train 1 are Japanese utilities Osaka Gas and Chubu Electric, which each control 2.2 million mt/year of capacity. Additional long-term contracts were signed with BP for 4.4 million mt/year of offtake capacity for Train 2, and France's Total and South Korea 's SK E&S, which are splitting another 4.4 million mt/year of offtake capacity at Train 3.

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

-- Harry Weber, Harry.Weber@spglobal.com

-- Edited by Keiron Greenhalgh, newsdesk@spglobal.com