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Freeport LNG Given More Time for 4th Texas Liquefaction Train

10/14/2022

(Reuters) — U.S. energy regulators extended to August 2028 the time U.S. LNG company Freeport LNG has to complete the fourth liquefaction train at its Texas export plant.

The three existing liquefaction trains at Freeport have been shut since June 8 after a pipe explosion. The company expects the plant to return to at least partial service in November.

The U.S. Federal Energy Regulatory Commission (FERC) said in a filing on Thursday that Freeport has not yet started construction of the fourth train, Yahoo reported.

Freeport said the project was delayed by the replacement of its engineering, procurement and construction contractor and the COVID-19 pandemic, including the pandemic’s effects on the global supply chain and the impact on global LNG demand.

However, Freeport said demand for LNG has rebounded and it has been actively negotiating with potential off-take customers.

Natural gas prices in Europe are up about 111% this year as LNG demand soars after supply disruptions and sanctions linked to Russia's Feb. 24 invasion of Ukraine.

Freeport said it will take about 48 to 56 months to build the new fourth train, which made it impossible to meet the previous FERC deadline of May 2026.

FERC first approved construction of the fourth train in May 2019, requiring Freeport to finish it by May 2023.

In September 2020 FERC extended the deadline to May 2026.

The three trains already at Freeport can turn about 2.1 billion cubic feet per day of natural gas into LNG.

Freeport's customers include units of Osaka Gas Co, JERA, BP, TotalEnergies and SK E&S. JERA is an alliance between units of Tokyo Electric Power Co Holdings Inc and Chubu Electric Power Co. Inc.