Freeport LNG said Monday it completed repairs to its Texas natural gas export plant and asked U.S. regulators for permission to take early steps to restart the facility that has been shut since June 8 because of a fire.
Freeport LNG sought permission to begin introducing liquefied natural gas into the plant’s piping system, according to a filing with the U.S Federal Energy Regulatory Commission, which noted “subsequent approvals would be necessary” to fully return the liquefaction trains to service/
Front-month U.S. natural gas futures (NG1:COM) surged as much as 9% on the news before settling +8.6% at $3.447/MMBtu, adding to earlier gains on forecasts for colder weather, after closing Friday at a 19-month low.
ETFs: (NYSEARCA:UNG), (UGAZF), (BOIL), (KOLD), (UNL), (FCG)
Freeport LNG sought approval “to commence cool down of its Loop 1 transfer piping and reinstate the facility’s boil off gas management compressors and associated piping,” according to the FERC filing, which would take ~11 days.
The procedure would be a first step to returning the 15M metric tons/year export plant to normal operations.
The outage has forced major offtakers including JERA, Osaka Gas, BP (BP), TotalEnergies (TTE) and SK E&S to take heavy losses.
While natural gas prices may bottom soon, the United States Natural Gas ETF (UNG) is “likely a poor bet today due to the immense ‘contango decay’ embedded in the futures curve,” Harrison Schwartz writes in an analysis newly posted on Seeking Alpha.