Freeport LNG gets the nod for commercial operations

Freeport LNG, the operator of the second-largest U.S. LNG export facility, has received regulatory approval to resume commercial operations of its natural gas liquefaction.

The Freeport LNG export facility in Texas has been shut down since June last year when a fire broke out and damaged the plant.

The authorization received provides for the immediate full return to service of one liquefaction train that has already restarted and the incremental restart and full return to service of a second train, Freeport LNG said in a statement.

The third liquefaction train will need subsequent regulatory approval for restart and a return to service once certain operational conditions are met.

First LNG production and ship loading from the facility—which currently uses two of Freeport LNG’s three LNG storage tanks and one of its two LNG berths—began on February 11, the company said.

The second LNG berth and third LNG storage tank are expected to return to service in May, Freeport LNG said.

Until it was forced to shut down due to the fire in June, Freeport, responsible for some 20% of total LNG exports from the United States and generating $35 billion in revenue during the first nine months of 2022, served Europe well as the continent looked to squelch a growing energy crisis this winter.

The return of Freeport LNG is set to further ease concerns about LNG supply in Europe, which has well managed its gas supply and demand so far this winter, mostly due to long periods of mild weather and lower consumption because of demand destruction in the industry and energy savings from households.

The restart of Freeport LNG exports could also lift U.S. benchmark natural gas prices, which had slumped by 3% to $2.00 per million British thermal units (MMBtu).