US Gas Exports Crippled by a Freeport LNG Plant Blast

At least 20 percent of US LNG export capacity will be knocked out for at least three weeks after one of the largest US plants producing liquefied natural gas (LNG) for export has been damaged by an explosion and fire in Texas.

The blast happened at the Freeport LNG plant at Quintana, some 112 kilometers south of Houston, and the company announced that the liquefaction facility is currently shut down and will remain shut down for a minimum of three weeks.

The Freeport facility supercools and liquifies about 2 billion cubic feet of natural gas per day.

The damage of the incident, which has forced the Texas Gulf Coast facility to cease operations in a move expected to impact European and Asian markets is also expected to force prices up and have wider ramifications for global markets after the US natural gas prices tumbled more than 6% on Wednesday.

The aerial footage captured by local TV broadcasters showed firefighters at the facility, but there were no signs of open flames, and no employees were injured, while the authorities said that there was also no risk to the community.

Though some witnesses reported a loud bang and a large fireball in the area, the exact cause of the fire and the extent of the damage remains unclear.

According to the Energy Information Administration, the US LNG exports were around 9.75bcf per day in 2021, hitting a record total of 100 billion cubic meters that year. A little over 22 billion cubic meters of US exports last year were headed to the EU.

Although President Biden allegedly promised to increase LNG deliveries by 15 bill cubic meters in 2022, some analysts noted that any additional gas sales to Europe would have to be taken from exports intended for other buyers since the US is already producing at full capacity

The major energy crisis stemming from the post-pandemic disruption to supply chains and the unprecedented Western sanctions campaign imposed on Moscow due to Russia’s invasion of Ukraine has particularly hit Europe, which still receives some 40% of its total natural gas imports from Russia, mostly via pipelines.

It has bought around 155 billion cubic meters in 2021.

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