Freeport LNG Shutdown in Texas to Continue Amid Power Issues

(Reuters) — U.S. liquefied natural gas company Freeport LNG said on Wednesday it closed its export plant in Texas on Tuesday due to a power feed problem during a winter storm and will keep it shut until power supply stabilizes.

"Freeport LNG's liquefaction production operations have been taken offline due to intermittent CenterPoint Energy power interruptions beginning early Tuesday morning," Freeport LNG told Reuters in an email.

"Our liquefaction production operations will remain offline until power transmission conditions stabilize," it added.

Officials at U.S. energy company CenterPoint Energy said its crews completed repairs and restored service to customers on Quintana Island who had experienced disruptions on Tuesday due to the storm.

The Freeport LNG plant is located in Quintana Island. Freeport is the only U.S. LNG plant that relies on the power grid to operate. This allows it to reduce its carbon footprint but has made it more susceptible to weather events. Last winter a storm caused damage to the plant's motors leading to reduced output for several months.

CenterPoint said in a press release on Tuesday that more than 99.9% of its customers continue to have power across the Greater Houston area and crews were continuing to respond to scattered customer outages.

PowerOutage.us, which tracks outages, said there were roughly 16,000 homes and businesses without power in Texas at around 8:17 a.m. EST (1317 GMT) on Wednesday, with around 3,700 of those out in CenterPoint's territory.

CenterPoint has said it provides power to around 2.8 million customers in Texas.

Freeport LNG is one of the most closely watched LNG export plants in the world because the start-up and halting of its operations often cause price swings in global gas markets.

Gas was trading around a 14-month high of $15 per million British thermal units at the Dutch Title Transfer Facility (TTF) benchmark in Europe due in part to the Freeport outage.

When flows to Freeport drop, gas prices in the United States usually decline due to the export plant's lower demand for the fuel, while prices in Europe usually increase due to a drop in LNG supplies available to global markets from the plant.

Financial firm LSEG said the amount of gas flowing to the eight big U.S. LNG export plants has risen to an average 15.0 billion cubic feet per day so far in January from 14.4 Bcf/d in December. That compares with a monthly record high of 14.7 Bcf/d in December 2023.

On a daily basis however, LNG feedgas dropped by 2.3 Bcf/d to a six-week low of 13.3 Bcf/d on Tuesday, due mostly to the Freeport outage.

Flows to Freeport were on track to rise to 0.3 Bcf/d on Wednesday, up from near zero on Tuesday, according to LSEG data. That compares with an average of 1.9 Bcf/d during the prior week.

One billion cubic feet of gas is enough to supply about 5 million U.S. homes for a day.

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