Explosion Hits U.S. LNG Plant In Texas, Natgas Prices Plunge
A explosion and fire on Wednesday hit the massive Freeport LNG liquefied natural gas plant on the Texas Gulf Coast, prompting an evacuation of nearby beaches and sending U.S. natural gas futures sharply lower.
There were no injuries and the fire that broke out was contained by noon, the company said. An "all clear" was issued by mid-afternoon, allowing employees to re-enter the facility, said Freeport, Texas, Police Chief Raymond Garivey.
Garivey said his department had not received word of any plant closure related to the fire, adding that they typically would be notified if a facility was shutting as a result of an incident.
U.S. natural gas futures sank following news of the explosion on concerns it could disrupt the plant's demand for gas. They closed down about 6% at $8.699 per million British thermal units (mmBtu), having hit a near 14-year high of $9.664 mmBtu earlier in the day.
Freeport LNG did not say what caused the fire and provided no comment on the status of plant operations. An investigation into what prompted the explosion was underway, a spokesperson for the company said.
A representative for the U.S. Coast Guard said a security zone had been set up two miles east and west of Freeport LNG's facility, closing that portion of the intracoastal waterway to vessel traffic.
An LNG tanker that was docked at the company was moved away on Wednesday as a precaution. The Port of Freeport was open, the Coast Guard representative said.
The explosion comes at a time when global demand for LNG has soared as European countries look to wean themselves off gas from Russia, following its invasion of neighboring Ukraine.
The plant can process up to 2.1 billion cubic feet of natural gas per day (bcfd) into a supercooled liquid for export. Earlier in the day, it was drawing about 2 bcfd of pipeline gas. One billion cubic feet of gas is enough to supply about five million U.S. homes for a day.
The explosion initially led to the evacuation of visitors at nearby beaches and parks and the closure of Quintana Island, where the facility is located, the Brazoria County Sheriff's Office said in a Facebook post.
The Chemical Safety Board said it was aware of the incident and monitoring the situation to determine if it should deploy a team.
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