(Adds background, comment from federal regulators)
Feb 9 (Reuters) - U.S. federal energy regulators on
Thursday approved Freeport LNG's request to return ship loading
to service at its long-idled Texas liquefied natural gas (LNG)
export plant.
Freeport, the second biggest U.S. LNG export plant, shut
after a fire in June 2022. The energy market expects gas prices
to rise once the plant starts producing LNG again.
When operating at full power, Freeport can turn about 2.1
billion cubic feet (bcf) of gas into LNG each day. That is about
2% of total U.S. daily gas production.
Gas futures prices gained about 3% on Thursday
following the latest Freeport news, rising to $2.46 per million
British thermal units after falling to a 25-month low in the
prior session. Many analysts do not expect Freeport to return to full power
until mid-March or later. A couple of Freeport's customers -
Japan's JERA and Osaka Gas - have
said they do not expect to get LNG from the plant until after
March.
Freeport was on track to receive about 69 million cubic feet
per day (mmcfd) of pipeline gas on Thursday, according to
Refinitiv data. Freeport has received an average of 34 mmcfd of
feedgas since Jan. 26 when federal regulators approved the
company's plan to start cooling parts of the plant.
Freeport has told state regulators that it would soon start
sending gas to one of the plant's three liquefaction trains,
which turn gas into LNG for export.
But the company - before Thursday's approval - was waiting
for permission from regulators to start loading LNG on ships to
free up space in its storage tanks.
In its filing on Thursday, the U.S. Federal Energy
Regulatory Commission said this authorization to "return to
service LNG Loop 1 circulation and dock 1 ship loading" does not
grant authorization to place liquefaction trains or other
remaining facilities back into service.
(Reporting by Scott DiSavino; editing by Jonathan Oatis)
Messaging: scott.disavino.thomsonreuters.com@reuters.net))
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