US Freeport LNG suspends operations until hurricane passes

(Montel) The Freeport LNG facility - the second largest LNG export terminal in the US - has suspended operations ahead of the arrival of Hurricane Beryl until safe to reopen, although analysts expect the impact on exports to be negligible.

"We safely ramped down production at our liquefaction facility on Sunday, ahead of Hurricane Beryl making landfall," Heather Browne, director of corporate communications, told Montel on Monday. "We intend to resume operations once it is safe to do so," she said, noting the safety of personnel and the community was Freeport LNG's "top priority". The tropical storm swept across the Caribbean Sea last week as a Category 5 hurricane and was expected to strengthen to a Category 2 hurricane at it makes landfall on the central Texas coast today.

The US Hurricane Center warned in its latest advisory update, this morning, that the combination of storm surge and tide would cause areas near the coast to be flooded by rising waters. Export impactNo vessels have left the 15m tonnes/year (20bcm/year) Freeport LNG facility since Saturday, according to Kpler vessel-tracking data, which showed the next vessel only provisionally scheduled to load on Thursday. "We do not currently expect severe damage from Hurricane Beryl in our base case assumption," said Jake Horslen, gas market analyst in Energy Aspects.

"Freeport appears to be the closest LNG plant to Beryl's path, and we have seen feedgas flows drop yesterday as a precaution. But we expect normal operations to resume by Wednesday," he added. Another source, with an LNG exporting firm, said there was unlikely to be more than one cargo affected by the temporary ramp-down in operations.

The US is Europe's largest supplier of LNG, providing nearly half - or 24m tonnes - of the region's 52m tonnes of imports so far this year, according to consultancy Kpler.

Freeport LNG provided a record 0.78m tonnes of the chilled fuel for the terminal to Europe - including Turkey - in December, but this has since dropped, reaching 0.44m tonnes in June.

Concerns about the impact of the hurricane on supply has provided some support for Europe's benchmark gas contract, with the TTF front month seen last up EUR 0.16 at EUR 33.23/MWh.