Increased Natural Gas Flow from Restarted Freeport LNG Plant Boosts Global Prices

The resumption of operations at the Freeport LNG export plant in Texas has resulted in a significant increase in natural gas flow, according to LSEG data. As of Thursday, gas flow to the plant was on track to reach a 16-week high, signaling a possible return to full capacity soon. This has had a notable impact on global gas prices, as the startup and shutdown of U.S. LNG export plants typically has a significant effect on prices. U.S. Gas futures at the Henry Hub benchmark in Louisiana have risen by roughly 38% over the past nine days as a result of the increased flow from Freeport following its exit from maintenance in late April. On Thursday, gas futures traded at a 14-week high of $2.23 per million British thermal units (mmBtu). With Freeport back online, the combined flow of gas to the seven largest U.S. LNG export facilities rose to 12.4 billion cubic feet per day (bcfd) during the current month, exceeding the previous high of 14.7 bcfd set in December. The quantity of gas flowing to the 2.1-bcfd Freeport terminal alone is projected to reach 1.7 bcfd, the highest level observed since January 14. Industry experts claim that all three trains at the Freeport facility are presently operational, albeit at reduced rates, owing to the volume of feedgas being supplied to it. Freeport officials declined to comment further on the increase in gas flow. Each of the plant’s three liquefaction trains has the ability to convert around 0.7 bcfd of gas into LNG. One billion cubic feet of gas is sufficient to provide power to approximately 5 million US households for a single day. Freeport announced in late March that Trains 1 and 2 would be idled until May for routine inspections and repairs, while Train 3 remained in operation. Nevertheless, Train 3 reportedly ceased functioning around April 11. (Source: Reuters)