Freeport LNG shuts down following an explosion at its Texas Gulf Coast facility
The three-week outage is a loss of LNG exports to EU and Asia of around 940,000 tonnes
An at least three-week shutdown at Freeport LNG, operator of one of the largest U.S. export plants producing liquefied natural gas (LNG), is expected to delay cargoes to Europe, further stressing the continent’s drive to phase out Russian gas, Reuters reports.
The outage at the plant, which provides around 20% of U.S. LNG processing capacity, began with an explosion at its Texas Gulf Coast facility on Wednesday. The plant historically sent most of its cargoes to Japan and Korea, but the outage will affect Europe, which has been pulling U.S. cargoes from the east because of the higher prices.
A three-week shutdown will mean the loss of around 13-15 cargoes, although Europe should be able to make up its losses from gas storage. But the risk remains if the shutdown extends for a longer period, said analysts.
In Europe, gas prices rose by up to a fifth on Thursday morning on fears lost U.S. shipments would stress a market already struggling with reduced Russian supplies. Prices cooled off later in the day.
Around 70% of Freeport’s monthly supplies in the past few months went to the European Union and Britain. France, Britain, Turkey and the Netherlands have been the biggest European importers from Freeport LNG this year, industry sources said.
