Freeport LNG Terminal Approved For Partial Restart

US natural gas futures erased some losses but still hovered sub $3 per million British thermal units after federal regulators approved Freeport LNG’s request for a partial restart of operations at the liquefied natural gas export terminal on the Texas coast. 

Federal Energy Regulatory Commission (FERC) approved Freeport LNG’s request to restart operations. Freeport was granted approval to   begin the “cool down” of its Loop 1 transfer piping and restart the terminal’s boil-off gas management compressors and other piping. 

Here’s what Houston-based energy firm Criterion Research told clients: 

The FERC has formally granted Freeport LNG approval to “commence commissioning, including cooldown, of Loop 1 LNG transfer piping and commissioning and reinstate service of the boil off gas (BOG) management system.” The letter was dated January 26, 2023 and the approval was based on an inspection conducted by the FERC and PHMSA onsite on January 25, 2023.

Moving forward, Freeport will need to request and receive approval for any further activity. This includes securing permission to “reinstate service for Loop 1 LNG circulation to enable ship loading to Dock 1 and to cooldown, recommission, and reinstate service of the liquefaction trains, including rundown piping to tanks.”

Based on Freeport’s initial request this week, the Loop 1 and BOG work will now take 11 days, placing the completion of that process on Monday, February 6, 2023.

Recall earlier this week. Freeport released a statement that it “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.” 

Freeport’s LNG net flows show some signs of life after being halted last June when an explosion rocked the facility and brought it offline. 

Even after the news, US NatGas futures are still deep in the red and sub $3 — mainly because of increased production, ample supply, and a mild winter. 

The question remains if NatGas prices will finally find a floor if Freeport begins a partial restart — considering the facility is one of the biggest export terminals in the US.