About one day after federal energy regulators approved Freeport LNG’s request to return vessels to its loading docks, the second-largest US LNG export plant on the Gulf Coast received its first LNG tanker.
For more on today’s developments. Here’s what Houston-based energy firm Criterion Research emailed clients:
Freeport LNG made a significant step forward this afternoon with the arrival of its first LNG tanker since June 2022. The Kmarin Diamond is now onsite and at Dock 1, just a day after the FERC gave Freeport permission to return Loop 1 back online, and use Dock 1 for ship loading.
The ship may or may not load down a full cargo, and we believe that the tanker will allow Freeport to offload LNG that has been stored in Tanks #1 and #2 since the terminal shut down.
Last week, they were granted approval to “commence commissioning, including cooldown, of the LNG rundown piping system and LNG train 3 (Unit 13).” Freeport is reportedly working through cooldown on Train 3 and rundown work on the line to Tank 2. There is a chance that they start flowing liquefied gas over the weekend as part of that process.
Clearly, they have been flowing at very low rates, with cumulative flows into the terminal since January 1, 2023, totaling 596 Mmcf if you count Coastal Bend and TETCO’s Stratton Ridge station, which both feed directly into the terminal. If you also include the indirect TETCO-BIG station, that total increases to 1,403 Bcf.
The terminal still has not requested approval from the FERC to reinstate service of the liquefaction trains, including rundown piping to tanks, so they are not yet bringing in feed gas for liquefaction. They will need to make that request and receive approval before the resumption of commercial service can start.
Some analysts do not expect a partial restart of the LNG export facility until the end of this month.
Traders want to know how US natural gas prices reacted to this news. Well, NatGas futures are up about 5% late in the cash session. Though we should note a combination of a warm winter, soaring production, and adequate supply has led to a 74% plunge in prices since August.
And for a full restart, Freeport still has to ask federal energy regulators for approval.