Freeport LNG to shutter for at least 3 weeks

The Freeport LNG export terminal in Texas will be shuttered for at least three weeks following an explosion there earlier today that roiled natural gas markets.

Even a temporary loss of exports from the terminal just south of Houston could leave about 2 Bcf/d (57mn m³/d) of gas available to meet gas demand for power generation or for injection into gas storage.

The US exported about 11.6 Bcf/d of LNG in May, up by 15pc from a year earlier. That sharp increase in exports, resulting from robust demand in international markets, helped drive Nymex prompt-month prices on 6 June to a 13-year settlement high of $9.322/mmBtu.

The prompt-month contract tumbled today by 6.4pc from, dropping below $9/mmBtu, after news of the incident. Gas flows on Gulf South, a key conduit for supplies to the terminal, fell today to zero.

The disruption at the 15mn t/yr Freeport terminal could help balance the US gas market and put additional downward pressure on prices. Injections into gas storage so far this year have lagged average levels on higher exports, sluggish production growth and strong demand for gas in the US power sector.

Freeport LNG did not disclose if there was damage from the incident or the cause. No one was injured, and the incident is under investigation, Freeport said.

By Jason Womack