Freeport LNG recently faced an explosion at its Texas Gulf coast, due to which the operator of one of the largest US export plants generating liquefied natural gas (LNG) will be closed for at least three weeks.
According to the analysts, the fire disrupted the natural gas markets in the US on June 8. It will likely impact markets in Europe and Asia as well.
After assessing damage to the enormous facility, Freeport LNG, which produces roughly 20% of US LNG processing, announced the shutdown.
The analysts added that its closure removes a key supplier from markets already stressed by rebounding demand in China and European consumers boycotting Russian LNG over Moscow’s invasion of Ukraine.
According to Alex Munton, director of global gas and LNG at research firm Rapidan Energy, Freeport LNG ships four cargoes per week; a three-week production outage would remove at least one million tonnes of LNG from the market.
He further stated this would lead to a crippling shortage causing a rise in LNG prices.
The plant can process up to 2.1 billion cubic feet of natural gas daily and export 15 million tonnes of liquid gas per annum at max capacity. As per the US Energy Information Administration, US LNG exports reached a new high of 9.7 billion cubic feet per day in 2021.