“Boon For Europe”: US NatGas Flows To Freeport LNG Hit ‘Record High’

Houston-based energy firm Criterion Research told clients Friday morning that the Freeport LNG export facility in Texas has recorded a surge in natural gas flowing into the plant. Inflows hit a daily record high as the export facility partially restarts operations. 

According to Criterion Research flow data, Freeport LNG nominations have surged to nearly 1.5 Bcf/d as of this morning, which implies that the terminal now has two full LNG trains operating. The pop in Freeport volumes pushed net US LNG feed gas demand above 14 Bcf/d, which is a new all-time high. 

Thus far, the FERC has given full regulatory approval for the restart of Trains 2 & 3, and there is a pending request by Freeport LNG to bring liquefaction Train 1 in the near term. Criterion currently believes the terminal could reach 2 Bcf/d by the end of March if the FERC gives them clearance to activate Train 1 in a timely manner. 

… and when operating at full power, Freeport’s three LNG trains will likely increase volumes north of 2 Bcf/d. Some analysts have suggested that the plant may not resume full capacity until late March or early April.

Criterion Research noted the return of Freeport is a “boon for Europe” as the continent rejiggers NatGas sourcing away from Russia. 

While the US natural gas market is mainly concerned about high production and the after-effects of a mild winter on storage, the return of Freeport is a boon for Europe as it moves closer to the storage refill season in the coming months. The added 2 Bcf/d in exports from Freeport will go a long way in helping to offset lost Russian volumes.

Freeport accounts for 15% of all US LNG exports. The prospect of Freeport returning has sent TTF price, Europe’s NatGas benchmark, lower over the last month. Other price pressures have been unseasonably warm weather and large supplies. 

And inversely, US NatGas prices have bounced 37% since falling around the $2 handle last month. Freeport’s return would mean tighter US markets as exports to Europe and or Asia ramp up in the months ahead. 

The return of Freeport LNG is excellent news for Europe’s supply ahead of the summer season.