U.S. LNG Plant In Texas To Be Shut For Three Weeks, Natgas Prices Plunge
Freeport LNG said its massive liquefied natural gas plant on the Texas Gulf Coast will stay shut for a minimum of three weeks following an explosion and fire on Wednesday that sent U.S. natural gas futures sharply lower.
The fire prompted an evacuation of nearby beaches, left no people injured and was contained by noon, the company said earlier in the day. The facility has been shut, Freeport LNG said later in the evening.
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.
An investigation into what prompted the explosion was underway, a spokesperson for the company said, without elaborating on the cause of the fire.
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 was moved away on Wednesday as a precaution.
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.
Several companies use Freeport to liquefy their gas, including units of BP, JERA, Kansai Electric, Osaka Gas, SK E&S and Total.
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