Home / Oil & Energy / General Energy News / US natural gas: Prolonged shutdown of the Freeport LNG facility

US natural gas: Prolonged shutdown of the Freeport LNG facility

The export terminal is the seventh largest in the world and the second largest in the US. The terminal’s export capacity is slightly above 2 billion cubic feet per day (bcf/d). US LNG exports averaged 11.5 bcf/d during the first four months of 2022, according to the Energy Information Administration.

Hence, the shutdown has had a significant impact on natural gas prices. With more natural gas staying in the US, the shutdown of the facility has weighed on US prices. However, with less natural gas available elsewhere, there has been upward pressure on European and Asian prices. The company’s earlier plan was to resume exports through September and return to full production by year-end. However, the US pipeline safety regulator has found unsafe conditions at the export terminal. These require its approval before the facility can restart. The regulator has notified the company that it has 60 days to submit a plan for an independent investigator to provide a report on the damage to the facility and must also have a third party review its LNG storage tanks.

With summer approaching, power demand to cool buildings will increase. Amid low coal inventories, we expect utilities to stick to natural gas to produce power. So we expect US prices to recover somewhat over the coming months.
Source: UBS

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping
error: Content is protected !!