The first-ever liquefied natural gas (LNG) vessel reached Freeport LNG long-idled plant based in Texas on Friday.
This is the first time since the facility closed down in a fire in June 2022, per ship tracking data. The LNG vessel named Kmarin Diamond is reportedly run by a unit of an oil major named BP PLC, one of Freeport’s most significant customers, per vessel tracking services.
News of the vessel reaching helped boost US natural gas futures on Friday by more than 5% in post-settlement trade as the second largest US LNG export plant will be consuming a significant amount of gas once it restarts production.
The contract had closed at a 25-month low earlier in the week owing to low heating demands and mild weather.
Freeport has mentioned that it would soon be sending gas to one of the three liquefaction trains of the plants, which liquefy fuel to be shipped overseas. Federal regulators, on Thursday, gave the firm permission to return vessel loading to service to free up space in its LNG storage tanks.
Analysts, however, have said they do not expect the plant to return to total capacity until mid-March or later. Freeport’s customers, like Japan’s Osaka Gas and JERA, have mentioned they don’t expect to get LNG from the plant until post-March.
The eight-month outage has compelled Osaka Gas and JERA to book hundreds of millions of dollars of losses.
Freeport’s other major buyers include TotalEnergies, SK E&S, and BP.
Freeport has reportedly also received an average of 35 million cubic feet of gas daily since January 26, when federal regulators had approved the firm to start cooling parts of the plant.
But that’s a mere fraction of the 2.1 billion cubic feet per day of gas Freeport can pull in as it operates at 100% power.
Kmarin Diamond had been waiting outside the Freeport since around 26 January, per shipping data.
Several tankers had been waiting in the Gulf to pick up LNG from the plant, including Prism Agility (from 2 Jan), Prism Brilliance (26 January), Nohshu Maru (31 January), and Corcovado LNG (10 February).
Besides, there are many vessels on their way to Freeport, including LNG Rosenrot (due to arrive around 11 Feb), Seapeak Bahrain (20 Feb), Gaslog Wales (23 Feb), British Achiever (24 Feb), and LNG Endurance (5 March).
References: Natural Gas World, Yahoo News