Freeport LNG reaches deal with US regulator to resume operations in early October

Freeport LNG said it has entered into a consent agreement with the Pipeline Hazardous Materials Safety Administration (PHMSA) to resume operations at its LNG export plant in Texas in early October.

In July, Freeport LNG said it expected to resume partial liquefaction operations at its export plant in Texas in early October after an incident took place at the facility on June 8.

Prior to that, PHMSA said that Freeport LNG must complete several corrective actions prior to restarting the plant.

The Freeport LNG facility has three trains and a capacity of more than 15 mtpa or some 2 billion cubic feet per day (Bcf/d).

Volumes enough to support Freeport LNG’s existing long-term customer agreements

Freeport LNG said on Wednesday that the obligations under the consent agreement are intended to ensure that the LNG terminal operator can “safely and confidently resume initial LNG production and thereafter ultimately return to full operation of all liquefaction facilities.”

In the near term, the deal includes certain corrective measures, many of which are currently underway, that Freeport LNG is to take to obtain PHMSA approval for an initial resumption of LNG production from its liquefaction facility.

“Freeport LNG continues to believe that it can complete the necessary corrective measures, along with the applicable repair and restoration activities, in order to resume initial operations in early October,” it said.

Those initial operations are expected to consist of three liquefaction trains, two LNG storage tanks and one LNG loading dock, which the company believes would enable delivery of about 2 Bcf per day of LNG, enough to support its existing long-term customer agreements, it said.

This means that the facility would reach almost full operations in early October.

This shutdown affected supplies and prices in Europe as most of the LNG produced at the Freeport plant landed in Europe this year.

Freeport LNG, led by billionaire Michael Smith, launched commercial operations in May 2020 for the third train at its Quintana Island facility.

This event also marked the full commercial operation of Freeport LNG’s $13.5 billion, three-train facility.

BP, Jera, Osaka Gas, SK E&S, and TotalEnergies have long-term contracts with Freeport LNG.

Freeport LNG is also planning to add another production unit with a capacity of 5 mtpa, but it has not yet taken a final investment decision.

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