Freeport LNG, operator of one of the largest US export plants producing liquefied natural gas (LNG), will shut for at least three weeks after an explosion at its Texas Gulf coast facility, raising the risk of gas shortages in Europe.
The plant, which provides about 20% of US LNG processing, announced the shutdown late on Wednesday after appraising damage to the massive facility.
On Thursday, European gas prices rose by up to a fifth as traders feared lost US shipments would stress a market already struggling with reduced Russian supplies.
The Freeport plant can process up to 2.1bn cubic ft of natural gas a day (bcfd) and at full capacity can export 15m tonnes per annum (MTPA) of the liquid gas. US LNG exports hit a record 9.7 bcfd last year, according to the US Energy Information Administration (EIA).
In March, 21 cargoes loaded at the Freeport facility, carrying an estimated 64bn cubic ft of gas to destinations in Europe, South Korea and China, according to the US Department of Energy. That’s up from 15 cargoes in February and 19 in January.
BP, TotalEnergies, Osaka Gas, Jera and SK are listed as the buyers of Freeport LNG cargoes, industry sources said.
Analysts said that about 70% of Freeport monthly supplies in the past few months went to the European Union and Britain.
France, UK, Turkey and Netherlands have been the biggest European importers from Freeport LNG this year.
A three-week outage at Freeport would result in a loss of about 940,000 tonnes of LNG, or about 13 cargoes, based on an average cargo size of about 70,000 tonnes, according to Alex Froley, LNG analyst at ICIS.
If Europe wants to keep importing LNG at the same level, replacement cargoes will need to be pulled in, probably from other Atlantic Basin projects, according to Edmund Siau, LNG analyst at consultancy FGE.
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( Information from theguardian.com was used in this report. To Read More, click here )