US natural gas futures jumped late in the session after news hit that Freeport LNG, a major liquefied natural gas export terminal on the Texas coast which has been closed since an explosion last summer, said repairs to the terminal are complete and is seeking approval for restart.
Freeport wrote a letter to the Federal Energy Regulatory Commission (FERC) requesting permission to restart the terminal that accounts for about 15% of all US LNG exports.
Pursuant to your letter dated June 30, 2022, Freeport LNG Development, LP (“Freeport”) must obtain written approval from FERC before restarting any non-emergency operations in existing facilities, constructing new or modified facilities, and commissioning and placing any facilities back into service.
As further described herein, Freeport has completed repairs to the Export Facility on Quintana Island, Texas, performed safety reviews, revised various procedures, implemented new safety systems and performed necessary training in order to safely begin to resume initial operations at its Export Facility.
NatGas surged 9% to $3.45 per million British thermal units.
NatGas prices will need to hold the 76.4% Fibonacci retracement level ($3.41) if further upside is to be achieved.
In recent weeks, we’ve pointed out Freeport flows were indications the plant was nearing a restart:
However, Houston-based energy firm Criterion Research had this to say:
Criterion’s weekly analysis of progress at Freeport LNG indicated that repair work was still taking place as of last week, so it’s unclear what Freeport means when it cited that they have “completed repairs.” We don’t believe feed gas will be flowing in January, and February still seems to be an optimistic time frame for strong nominations. Based on prior announcements, once they get the green light to restart, Freeport’s timeline pinned down a ramp from zero to 2 Bcf/d over an approximately two-month period.
Freeport LNG reported that it has “completed repairs” at its export terminal and asked for approval to start cooling down its Loop 1 LNG Transfer piping. They have not yet asked to start circulating LNG, loading LNG or for the startup of liquefaction onsite. #natgas #ongt #lng pic.twitter.com/rdrca4N8fP
— Criterion Research (@PipelineFlows) January 23, 2023
Here’s Freeport’s full letter to FERC:
Any February cold weather across the Lower 48, plus the Freeport export restart, could be bullish catalysts for reversing months of sliding NatGas prices.
78 total views, 1 views today