Smoke billows from the Freeport LNG plant in Quintana, Texas, U.S., June 8, 2022, on this nonetheless picture obtained from a social media video on June 9, 2022.
Maribel Hill | Reuters
Natural fuel costs plunged on Tuesday, after Freeport LNG stated its facility that had a hearth final week seemingly will not be again up and working anytime quickly.
“[C]ompletion of all necessary repairs and a return to full plant operations is not expected until late 2022,” the corporate stated Tuesday in a press release. The facility, positioned in Quintana Island, Texas, suffered an explosion final Wednesday.
“Given the relatively contained area of the facility physically impacted by the incident, a resumption of partial operations is targeted to be achieved in approximately 90 days,” Freeport LNG stated.
U.S. pure fuel fell about 16% to $7.22 per million British thermal models (MMBtu).
“The U.S. natural gas market will now be temporarily oversupplied as 2 bcf/d or a little over 2% of demand for U.S. natural gas has been abruptly eliminated,” stated Rob Thummel, managing director at Tortoise Capital.
“U.S. natural gas supply will likely remain at current levels as producers won’t reduce production by 2 bcf/d. The result is an oversupplied U.S. natural gas market,” he added.
Freeport’s operation is roughly 17% of the U.S.’ LNG processing capability.
Despite Tuesday’s drop, pure fuel costs are nonetheless up 93% for the reason that begin of the yr. Demand has rebounded as worldwide economies emerge from the pandemic, whereas provide has remained constrained.
Russia’s invasion of Ukraine upended a market that was already tight. As Europe appears to maneuver away from Russian power, document quantities of U.S. LNG are actually heading to the continent.
Surging costs are including to inflationary pressures throughout the economic system. Drivers are already grappling with document costs on the pump with the nationwide common for a gallon of fuel topping $5 over the weekend, and now utility payments are additionally set to rise.
Natural fuel costs surged above $9 per MMBtu in May, hitting the best degree since August 2008.
After the explosion at Freeport’s facility final week, the corporate initially stated the plant can be shut for a number of weeks.
“The incident occurred in pipe racks that support the transfer of LNG from the facility’s LNG storage tank area to the terminal’s dock facilities,” the corporate stated Tuesday. “None of the liquefaction trains, LNG storage tanks, dock facilities, or LNG process areas were impacted,” the corporate added.
httpspercent3Apercent2Fpercent2Fwww.cnbc.compercent2F2022percent2F06percent2F14percent2Fnatural-gas-plummets-as-freeport-delays-facility-restart-following-explosion.html
