September 12, 2023 [Reuters]- Feedgas flows to Freeport LNG, the second-largest U.S. liquefied natural gas exporter, dropped sharply over the weekend and remained down for the third day in a row on Monday, LSEG data showed.
Input levels on the pipeline serving the facility showed feed levels had fallen to 702.9 million cubic feet per day (mcf/day) on Sept. 9 and dropped further to 284.3 mcf/day on Sept. 10, down from 1,640.3 mcf/day Sept. 8, LSEG data showed.
Feedgas for Monday, Sept. 11, stood at about 622 mcf/d.
Freeport LNG declined to comment.
Gulf South Pipeline, through which Freeport LNG receives feedgas, said in a note that due to “customer’s failure to take confirmed quantities” to Freeport LNG, it anticipated confirmation reductions for the remaining nomination cycles for Gas Day Sept. 10.
The Freeport facility draws 2 billion cubic feet per day (bcfd) of natural gas from U.S. shale producers.
“The plant often experiences unit trips, but the drop in feedgas flows over the weekend suggests that at least two trains are not taking any gas,” said Leo Kabouche, LNG market analyst at consultancy Energy Aspects.
Freeport LNG has had at least six emission events over the last two months, according to state environmental agency Texas Commission on Environmental Quality (TCEQ). There was a reduction in feedgas intake of between 200 mcf and 500 mcf on those six occasions, according to LSEG data.
Four events affected Train 3 processing unit, with the most recent on Sept. 5. The other two occasions in which gas usage fell were caused by events at Train 1 unit, according to the TCEQ report.
Each time there was a return to normal operations within 48 hours.
The continued reduction in feedgas intake reflects operational challenges at Trains 1 and 3, said one person familiar with Freeport LNG’s operations.
The Freeport export plant in Texas was shut down after a fire in June 2022, and ended an eight-month outage in February.
U.S. natural gas futures held near a one-week high on Monday on a big daily drop in U.S. output and much higher global gas prices. Capping those gains were forecasts for milder weather, lower demand over the next two weeks and the reduction in feedgas to Freeport LNG.
An outage at the facility would add to market concerns over global LNG supply as workers at Chevron Corp’s (CVX.N) Gorgon and Wheatstone LNG projects in Australia began hours-long work stoppages on Friday, with the industrial unrest leading to a spike in European gas prices.
The workers plan a total strike for two weeks from Sept. 14, while Chevron said it would ask Australia’s industrial relations tribunal to intervene to halt strike action.
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