Freeport LNG stays below the highlight of the worldwide market.
That’s what Rystad Power Vice President Wei Xiong mentioned in a Rystad gasoline and LNG market replace despatched to Rigzone on Thursday by the Rystad crew, noting that the U.S. liquefaction plant “halted operations earlier than Hurricane Beryl’s arrival alongside the U.S. Gulf Coast per week earlier”.
“The ability’s longer than anticipated closure has restoked some concern over world liquefied pure gasoline provide danger, regardless of the remaining U.S. liquefaction capacities being largely unaffected by the hurricane,” Xiong added.
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Within the replace, Xiong highlighted that Freeport went offline on July 7 earlier than Hurricane Beryl made landfall in Texas.
“Some tools of the ability was broken by the hurricane and is being repaired, in response to an announcement by Freeport LNG,” Xiong mentioned within the replace.
“The terminal plans to renew operations of one in every of its three trains this week, with a capability of 5.1 million tons every year (Mtpa). There’s, nevertheless, uncertainty concerning the timeline of the resumption of one other two trains,” Xiong added.
“Feedgas flows to the terminal remained at minimal ranges of solely 8.7 million cubic toes per day (Mcfd) on 14 July, in comparison with almost 2 billion cubic toes per day (Bcfd) on 6 July earlier than the hurricane’s arrival, indicating the ability was nonetheless offline final weekend,” Xiong continued.
The Rystad Power VP highlighted within the replace that information from Rystad Power LNG Vessel Tracker signifies that 4 vessels are at present ready exterior Freeport LNG.
“The terminal has seen intensive outages in recent times, together with a close to 10-month shutdown from mid-2022 to the primary quarter of 2023 resulting from an explosion, whereas there have additionally been noticeable outages this yr,” Xiong mentioned within the replace.
“Almost 9 million tons (Mt), 2.9 Mt, and three.2 Mt of manufacturing losses occurred in 2022, 2023, and 2024 yr up to now, respectively, resulting from Freeport LNG’s downtime,” Xiong added.
“Given its report of impacts, the extended restart this time and uncertainty about its full resumption have raised contemporary issues over U.S. LNG provide danger,” Xiong continued.
The Rystad VP famous within the replace that decreased gasoline flows to LNG export terminals, excessive gasoline storage, and elevated dry gasoline manufacturing dragged down the Henry Hub worth by 6.66 p.c week on week from $2.344 per MMBtu to $2.188 per MMBtu on 16 July.
“U.S. gasoline storage accelerated injections, up 65 billion cubic toes (Bcf) week on week to three,199 Bcf for the week ending 5 July,” Xiong mentioned within the replace.
“That is 19 p.c greater than the five-year common and 10 p.c greater than the identical interval of final yr. Within the meantime, U.S. Decrease 48 each day dry gasoline manufacturing has averaged 102.2 Bcfd in July month up to now, at an identical degree to June, which registered 102.3 Bcfd, in comparison with 101.3 Bcfd in Could,” Xiong added.
“These downsides have largely offset the restricted upside from heatwaves, additionally seen in Europe and North Asia, which lifted gas-for-power demand in the USA. Fuel consumption within the energy sector spiked to a report excessive of 54.52 Bcfd on 9 July,” Xiong continued.
“Increased than regular temperatures within the Pacific area are anticipated to final till late July.
Summer season climate is the principle issue to be careful for within the coming weeks, along with the restart timeline of Freeport LNG,” Xiong went on to state.
Within the replace, Xiong mentioned provide danger surrounding Freeport LNG has pushed European gasoline costs to rebound from a close to two-month low, “because the U.S. liquefaction plant has been one of many major sources of Europe’s LNG flows”.
“Almost 5.4 p.c of Europe’s LNG imports in 2023, equal to six.35 Mt, got here from Freeport LNG. Information for the yr up to now reveals 2.58 Mt of LNG flows from Freeport LNG to Europe, accounting for 4.6 p.c of Europe’s LNG imports in the identical interval,” Xiong mentioned within the replace.
“One other upside comes from heatwaves in Southern Europe. Many Italian cities have issued emergency warmth alerts, as temperatures may rise above 40 levels Celsius. Above-normal temperatures in Italy and Greece are anticipated to final till early August,” Xiong added.
“Given general brimming provides in Europe, the bullish components might not be capable of lend lasting help on costs,” Xiong warned.
Xiong highlighted within the replace that the Title Switch Facility (TTF) worth in Europe rose 4.67 p.c week on week from €31.335 ($34.26) per megawatt-hour (MWh) to €32.797 per MWh on 16 July.
Rigzone requested Freeport LNG when the liquefaction plant will resume full operations and for touch upon Rystad’s gasoline and LNG market replace.
In response, a Freeport LNG spokesperson informed Rigzone, “we’re safely progressing our efforts in the direction of the phased restart of our liquefaction operations”.
“We’re finishing preliminary repairs on the injury sustained to our fin fan air coolers within the hurricane and anticipate restarting the primary prepare this week. We plan to restart the remaining two trains shortly thereafter,” the spokesperson added.
“Manufacturing ranges after restart will probably be at decreased charges for a time frame as we proceed repairs whereas working the ability. Manufacturing will steadily ramp as much as full charges as these repairs are accomplished,” the spokesperson continued.
The spokesperson informed Rigzone that the corporate has no remark past this data.
In a Rystad Power market replace despatched to Rigzone on July 9 by the Rystad crew, Rystad Power International Market Evaluation Director Claudio Galimberti mentioned Beryl had had a restricted affect on manufacturing and refining belongings.
At one level, greater than 2.34 million electrical prospects in Texas, greater than 23,000 electrical prospects in Louisiana, and greater than 15,000 electrical prospects in Arkansas had been with out energy, in response to the PowerOutage.us web site. The positioning describes itself as an ongoing venture created to trace, report, and mixture energy outages throughout the USA.
At Hurricane Beryl’s peak on July 8, 15 manufacturing platforms had been evacuated and shut-in manufacturing reached 151,306 barrels of oil per day and 154 million cubic toes of gasoline per day, a publish on the X web page of the Bureau of Security and Environmental Enforcement (BSEE) revealed.
BSEE describes itself because the lead U.S. company charged with bettering security and making certain environmental safety associated to the oil and pure gasoline business on the U.S. Outer Continental Shelf.
To contact the creator, e-mail andreas.exarheas@rigzone.com
