Freeport LNG cancels four cargoes since feedgas intake fell-sources

Freeport LNG, the second-largest U.S. liquefied natural gas exporter, has cancelled four cargoes since its feedgas intake dropped below normal capacity, industry sources told Reuters on Thursday.

The cargoes cancelled included ones for a major portfolio player and a Japanese firm, the sources said.

BP, TotalEnergies, Osaka Gas, Japan’s biggest power generator JERA and South Korea’s SK Gas Trading are listed as buyers of Freeport LNG cargoes.

Freeport LNG’s natural gas intake at its plant in Texas inched up on Thursday but remained well below capacity for the sixth straight day, according to LSEG data.

Accounting for 20% of U.S. LNG exports, an outage at the facility would add to market concerns over global LNG supply, especially as Chevron’s Wheatstone facility in Australia suffered a fault affecting about a quarter of its LNG production on Thursday, the same day that workers were set to escalate strike action.

Freeport feedgas intake was at 0.9 billioncubic feet per day (bcfd) on Thursday, up from an average of 0.3 bcfd over the past four days, but remainedaround 46.5% of its typical draw of about 2 bcfd of natural gas, LSEG data showed.

Freeport LNG said it does not comment on its commercial activity, including cargo activity.

Analysts have said that least two of the facility’s three gas processing trains could be idled.

An industry source said today’s slight rise suggests that one train is back online and that the company could begin ramping up operations in the next few days.

U.S. natural gas futures NGc1 jumped about 5% to a five-week high earlier on Thursday on a drop in daily output, a rise in oil crude futures, and signs that the Freeport LNG plant started pulling in a bit more feedgas.

LNG tanker BW Pavilion Aranda, which has been anchored around the facility for the past five days was docked on Thursday, suggesting it could load a cargo in the near term.

Three other tankers – LNG Schneeweisschen, Marvel Crane and Hellas Diana – were anchored outside the facility, according to LSEG data.

Freeport LNG has had at least six emission events over the last two months tied to malfunctions, according to state environmental agency, the Texas Commission on Environmental Quality (TCEQ).

Four events affected the 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 the Train 1 unit, according to the TCEQ.

Each time there was a return to normal operations within 48 hours.
Source: Reuters (Reporting by Marwa Rashad; additional reporting by Scott Di Savino in New York; Editing by Nina Chestney)