Fire-idled Freeport LNG seeks U.S. approval to start one unit
Adds customer comments, environmentalist reaction
By Scott DiSavino
Jan 31 (Reuters) -Freeport LNG asked U.S. regulators for approval to add natural gas to one of the three idled units at its liquefied natural gas (LNG) export plant in Texas, a milestone in efforts to restore production after a seven-month outage, according to a federal filing made available on Tuesday.
The Freeport plant, the second-largest in the United States, shut after a fiery blast last June, cutting supplies as global LNG demand soared over Russia's invasion of Ukraine. Federal officials barred the producer from resuming production until they could complete an extensive safety evaluation.
The June 8 shutdown drove up global prices TRNLTTFMc1, JKMc1 for the superchilled gas to record levels last summer just as Europe was struggling to replace supplies of Russian gas cut in response to European sanctions on Russia for the Ukraine invasion.
Freeport LNG in a filing dated Monday asked the U.S. Federal Energy Regulatory Commission (FERC) for permission to put gas into one of the plant's three liquefaction units for "initial LNG production."
Even with the steps proposed, analysts believe it could be months before the plant's three units will be fully operational.
"Our expected timeline for restart remains mid-March," Rystad Energy analyst Ade Allen wrote in a report published before the FERC filing was posted.
"We expect it will take about 60 days from restart to 100% utilization," Allen added.
JERA, one of Freeport's five big customers, said it was not counting on getting LNG from the plant by the end of March.
The outage forced big customers including JERA and Osaka Gas 9532.T to book hundreds of millions of dollars of losses. Its other big buyers include BP BP.L, TotalEnergies TTEF.PA and SK E&S.
The shutdown left more gas available to domestic customers, helping contribute to depressed U.S. gas prices. U.S. gas futures NGc1 traded at a 21-month low this week. NGA/
Freeport can draw up to 2.1 billion cubic feet per day (bcfd) of gas and turn it into LNG when operating at full power. That is about 2% of what U.S. gas producers pull out of the ground each day.
In addition to deciding on Freeport's latest request, regulators at FERC and the Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) must decide whether to allow public hearings, as some of Freeport's community groups have requested, and whether to open Freeport's filings, as the Sierra Club environmental group has requested.
That is because almost all documents filed by Freeport have been "privileged and confidential" so only regulators and Freeport know what the company is doing.
"We can't know if Freeport is doing enough to come back online because we still know very little about the source of the explosion and next to nothing about the changes that have been made to restart," said Rebekah Hinojosa, senior Gulf Coast campaign representative for Sierra Club's Beyond Dirty Fuels Campaign.
Reporting by Scott DiSavino; editing by Jonathan Oatis and Will Dunham
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