Pipelines Flow Small Amounts of Natural Gas to Shuttered Freeport LNG Plant in Texas

(Reuters) — Small amounts of natural gas were flowing from interstate pipelines to Freeport LNG's shuttered liquefied natural gas (LNG) export plant in Texas this week.

The company has long said it does not expect the plant to return to partial service until October but was not immediately available to explain the small amount of feed gas going to the plant. 

Data provider Refinitiv said about 22 MMcf/d of gas has been flowing to the plant since July 19.

That compares with an average of 2.0 Bcf/d during the month before the plant shut after a fire and explosion on June 8.

Traders have said that if any gas was flowing to the plant — with such small amount it could be phantom flows - it was likely to test some equipment.

Federal regulators, including the U.S. Federal Energy Regulatory Commission (FERC) and the U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA), have said they would not allow the facility to return to service until they approve the restart. 

The shutdown of Freeport caused gas prices in Europe to jump about 40% in the following week because it reduced the volume of available LNG exports from the United States at a time when the world was short on gas supply.

Europe has been buying U.S. LNG heavily due to reduced flows from Russia following its invasion of Ukraine on Feb. 24 and subsequent sanctions placed on Moscow by the United States and its allies. 

The Freeport shutdown also caused U.S. gas prices to drop more than 40% during the month after the outage because it left more fuel in the United States, allowing utilities to quickly rebuild low gas stockpiles.

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