• Natural Gas News

    Freeport LNG faces three-month shutdown after incident

Summary

US spot gas prices down, TTF higher after production delay announced. [Image credit: Freeport LNG Development, L.P.]

by: Dale Lunan

Posted in:

Complimentary, NGW News Alert, Natural Gas & LNG News, Americas, Europe, Liquefied Natural Gas (LNG), Top Stories, Security of Supply, Corporate, Market News

Freeport LNG faces three-month shutdown after incident

Freeport LNG said June 14 it would take at least 90 days to resume partial operations following a June 8 incident which saw LNG released to the atmosphere, producing a natural gas vapour cloud and subsequent brief fire.

Completion of all repairs and resumption of full operations at the 15mn mt/yr liquefaction facility on Quintana Island in Texas is not expected until late this year, Freeport LNG said in a statement posted to its website.

The extended closure of the facility, which accounts for about 20% of all US LNG production, contributed to another rapid drop in US domestic natural gas prices. July contracts on the New York Mercantile Exchange – a proxy for physical pricing at Henry Hub – were off more than 16% in late morning trade, at $7.225/mnBtu.

In Europe, front month natural gas contracts on the Dutch Title Transfer Facility (TTF) spiked above €101/MWh in early trading June 14, but later settled to around €98/MWh in afternoon trading.

In its first public statement following the June 8 incident, Freeport said the release occurred in pipe racks supporting the transfer of LNG from storage tanks to the terminal’s marine loading facility. 

“Preliminary observations suggest that the incident resulted from the overpressure and rupture of a segment of an LNG transfer line, leading to the rapid flashing of LNG and the release and ignition of the natural gas vapor cloud,” Freeport said.

The resulting flash fire lasted only about 10 seconds, it said, while a subsequent fire, fed by nearby materials like piping insulation and cabling, was extinguished after about 40 minutes.