Restart of Freeport LNG Delayed for Fourth Time Now to January 2023

Freeport LNG announced that while reconstruction of the damaged LNG plant and export operation on the Texas gulf coast is substantially completed that it is pushing back the expected restart date while it waits for regulatory approval. The delay comes as LNG exports are in high demand and mark the fourth delay since an explosion in June forced the shutdown of the operation. 

After five months of investigation, the company said that independent investors determined that the root cause of the June explosion was the pressure safety valve testing procedure and car seal program deficiencies along with temperature indicator alarms that could have been used to warn operators of increasing temperatures in LNG piping during operations. On June 8, operators isolated a piping segment containing cryogenic liquefied natural gas which lacked the proper overpressure protection. The LNG then warmed and expanded due to exposure to ambient conditions, resulting in a boiling liquid, expanding vapor explosion, and rupturing of the piping segment.

The company reported that as of December 23, the reconstruction work necessary to commence initial operations is substantially complete and that they are submitting responses to the last remaining questions included in the Federal Energy Regulatory Commission's December 12 data request. Regulators were reportedly critical of some of the procedures at the plant and issued a report with 64 items identified that it was seeking further information or needing to be addressed before the plant resumes operation.

“Given the time needed for the regulatory agencies to review the company's responses and to seek any necessary clarification, Freeport LNG now does not anticipate commencing the initial restart of its liquefaction facility until the second half of January 2023. The company continues to have close, collaborative engagement with the regulatory agencies and that engagement will continue as Freeport LNG works towards the safe restart of its facility,” they wrote in the latest update.

Two months after the explosion, Freeport reported it was targeting October to resume operations. Since then, they have twice delayed the restart first to November and then mid-December. The company has said the restart plan calls for restarting each of the three liquefaction trains one at a time in sequence. Each will be restarted and ramped up slowly and deliberately. They had previously projected the operation would reach approximately 2 BCF per day of production in January 2023 and that full production utilizing both docks was anticipated for March 2023.

The Freeport LNG plant represents about two percent of daily U.S. production. The plant handles up to 100 ships per month with long-term offtake agreements with JERA and Osaka Gas, BP, TotalEnergies, and SK E&S.