Video: Explosion Shutters Freeport LNG Export Plant for Three Weeks
Natural gas spot prices in the UK have jumped more than 30 percent percent on news of an explosion and fire at the Freeport LNG export terminal in Brazoria County, Texas. Freeport LNG handles 20 percent of America's LNG exports, and it is expected to be offline for at least three weeks, with supply ramifications for a strained global natural gas market.
A blast shook the small beach community of Quintana at about 1140 hours on Wednesday, and a fireball was captured on security cameras at a local county park. 26 fire departments from around the region responded and sent trucks to the scene, according to the Brazos County Fire Marshal's Office. The fire was out and the situation was stabilized by the end of the day.
No injuries or pollution have been reported, and all employees at the plant have been accounted for. Federal and state investigators have descended upon the Freeport LNG plant and will be looking into possible explanations for the blast.
The shutdown is desirable news for Russian foreign policy: the majority of U.S. LNG goes to supply the European market, where America's NATO allies are attempting to wean their economies off pipeline gas from Russia in an attempt to undercut the Russian invasion of Ukraine. Analysts believe that the outage will take more than a dozen cargoes off the market this summer, according to Reuters, amounting to nearly one million tonnes of LNG that will not be available to replenish Europe's storage before winter.
The shutdown is also positive news for American consumers, who have seen gas prices quadruple over the past two years - the same timeline that exports from new plants like Freeport LNG and Corpus Christi LNG began to soar. As of early June, U.S. LNG plants consumed about 13 percent of the total American natural gas supply, including two percent for Freeport LNG alone. American Henry Hub natural gas futures shed about six percent in trading on Wednesday on news of Freeport LNG's shutdown, reflecting expectations of more gas available to refill American storage stocks before the winter heating season.