Freeport LNG plant in Texas still pulling in natgas to produce power

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FILE PHOTO: An LNG tanker is tugged towards a thermal power station in Futtsu

(Reuters) -U.S. liquefied natural gas (LNG) company Freeport LNG said on Thursday it was still pulling in small amounts of natural gas from pipelines at its shuttered LNG export plant in Texas to fuel a power plant.

The company has said it expects the liquefaction plant, which shut due to a fire on June 8, to return to at least partial service in early October.

U.S. gas futures jumped about 8% on Thursday on talk of increased gas flows to the Freeport LNG plant, a drop in gas output and forecasts for more demand for the fuel over the next two weeks than previously expected. [NGA/]

Freeport LNG started to pull in small amounts of pipeline gas to feed a power plant that sold electricity to the Texas grid in mid-July.

Meanwhile, Freeport LNG retracted the force majeure it initially declared after the explosion in June, a development that could cost its buyers billions of dollars in losses.

“Freeport LNG is currently drawing a small amount of gas off pipeline connections … to fuel a gas-turbine generator at its natural gas pretreatment facility in order to generate and export about 50 (megawatts) of power to the state’s electricity grid,” Freeport LNG spokesperson Heather Browne said in an email.

Data provider Refinitiv said about 22 million cubic feet per day (mmcfd) of gas flowed to the plant from July 19 until earlier this week.

That compares with an average of 2.0 billion cubic feet per day (bcfd) during the month before the plant shut.

Gas markets in the United States and Europe have swung wildly on developments at the Freeport LNG plant. Prices in Europe jumped about 40% in the week after the plant shut because the world was already short on gas supplies due to Russia’s invasion of Ukraine in February.

(Reporting by Scott DiSavino; editing by Jonathan Oatis and Paul Simao)