Fire causes shutdown of Freeport LNG export terminal

According to Freeport LNG Development, L.P., preliminary observations suggest that the fire was caused by excess pressure in an LNG transfer line that transfers LNG from the facility’s storage tank to the terminal’s dock facilities. The fire did not affect the main facilities, such as liquefaction trains, LNG storage tanks, dock facilities, and LNG process areas. The company announced that the terminal is not expected to return to full service until late 2022, although a resumption of partial operations is targeted to occur in approximately 90 days.

Freeport LNG is one of seven LNG export facilities currently operating in the US. Freeport LNG has three liquefaction units (called trains) in operation, with a combined baseload capacity of 1.98 billion ft³/d and peak capacity of 2.14 ft³/d. The facility shipped its first LNG cargo in September 2019, and it was the fifth US LNG export terminal to come online in the Lower 48 states. A fourth liquefaction train (with a capacity of 0.67 billion ft³/d) has been fully approved, but it has not yet reached a Final Investment Decision (FID).

Outages at Freeport LNG have occurred in the past but were either of short duration or were limited in scope. For example, in February 2021, Freeport LNG voluntarily shut down two trains to reduce the use of natural gas and electric power consumption during a freezing weather event that caused blackouts across the state. In June 2021, two unplanned outages occurred within the span of a week. Both outages occurred due to compressor malfunctions, but each only briefly reduced overall production capacity.

Feedgas (natural gas delivered by pipeline to an LNG liquefaction facility) flowing to Freeport LNG averaged 1.77 billion ft³/d from January to May 2022, and it averaged 1.83 billion ft³/d during the seven days prior to the fire, according to analysis of data from PointLogic. Similar to other US LNG export facilities, Freeport has been operating at high utilisation rates in 2022. During January – May 2022, Freeport’s utilisation averaged 92% of peak capacity, compared with an 86% peak capacity utilisation during the same period in 2021 and an annual average of 87% in 2021, according to EIA estimates.

Exports from the Freeport LNG terminal averaged 2.0 billion ft³/d from January to May 2022, compared with 1.8 billion ft³/d during the same period in 2021 and an annual average of 1.9 billion ft³/d in 2021. Similar to other US LNG export facilities, almost three-quarters (71%) of exports from Freeport LNG were shipped to Europe (including Turkey) during the first five months of 2022, compared with 29% on average during 2021. In January – May 2022, LNG exports from Freeport to Asia declined by 63% compared with 2021 and averaged 0.3 billion ft³/d (17% of the total exports).

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