The shutdown of Freeport LNG reduced U.S natural gas export capacity by an estimated 2.0 billion cubic feet per day, according to a report from the U.S. Energy Information Administration (EIA).
A fire at Freeport LNG's natural gas liquefaction plant led to the full shutdown of the facility on June 8. According to the EIA, the shutdown contributed to a $1.27 per million British thermal units (MMBtu) decrease in U.S. benchmark Henry Hub natural gas spot price.
"The shutdown reduced U.S. export capacity by an estimated 2.0 billion cubic feet per day, and as a result, the U.S. benchmark Henry Hub natural gas spot price fell by $1.27 MMBtu to $8.16/MMBtu on June 9. The Henry Hub price continued to decline through the end of June, ending the month at $6.54/MMBtu. Prices fell largely because the outage at Freeport LNG decreased U.S. natural gas exports (a factor in U.S. natural gas demand), putting downward pressure on natural gas prices," the EIA report stated.
During the recent 16th Annual Industrial Procurement Forum Breakfast held July 14 in Pasadena, Texas, Freeport LNG COO and the event's keynote speaker, Mark Mallett, estimated that partial liquefaction operations will resume in October 2022.
"We are very mindful that what happened at Freeport LNG and the suspension of our operations impacts U.S. natural gas prices and impacts global LNG and therefore European gas prices," Mallett told the audience of approximately 250 Gulf Coast industry leaders.
"We anticipate getting back up and running on the partial operation early to mid October and under those conditions we'll be able to meet our obligations to our customers and then full production, full operations by the end of the year," he added.
