A fire and explosion occurred at Freeport LNG in June, resulting in a release of LNG (source: Freeport LNG)
One of the largest LNG export facilities in the US, Freeport LNG, must take several corrective actions before it can restart liquefaction production activities following a fire and explosion on 8 June
As a result, the facility will not return to full operations for months at a time when Europe faces lowering gas flows from Russia, increased competition for LNG from Asia and higher energy prices.
Freeport LNG received a notice of proposed safety order from the Pipeline and Hazardous Materials Safety Administration (PHMSA) 30 June regarding the incident at the Quintana Island, Texas, facility. The notice said an explosion and associated fire occurred in a pipe rack located near the LNG storage tanks at Freeport’s LNG export facility, releasing an estimated 12M cubic feet of LNG. There were no injuries or fatalities, nor were there any direct physical impacts offsite.
PHMSA said a preliminary investigation indicates “conditions exist at Freeport’s LNG export facility that pose an integrity risk to public safety, property, or the environment.”
While the root cause of the failure has yet to be confirmed, preliminary findings suggest an isolated pressure safety valve created an overpressure situation in about 91 m of vacuum insulated piping. The pipe was subjected to an overpressure situation which burst the pipe and allowed LNG and methane to be released into the facility. The sudden release of LNG and methane from the piping caused a subsequent explosion and fire that damaged piping and components in the plant. At PHMSA’s direction, Freeport engaged a third-party consultant, IFO Group, to conduct a root cause failure analysis of the explosion and subsequent fire and release of LNG.
The failure occurred in a pipe that is part of the LNG transfer system and was used to transfer LNG throughout the LNG storage tank area. The affected vacuum insulated piping is a part of Loop 2 located on an aboveground pipe rack within the LNG storage area of the facility. Specifically, the affected vacuum insulated piping is located in a structural steel pipe rack supporting transfer piping, power cables, utility piping and instrument cable trays. The affected piping is located 9 m above ground level and is in the main artery pipe rack where transfer of material occurs between Tank 3 and ship loading areas. The pipe racks consist of a series of transverse beams that run along the length of the pipe system, spaced at uniform intervals.
In addition to the 46-cm vacuum insulated pipe being damaged by the explosion and associated fire, much of the other piping in the area was also damaged and will require repairs or replacement before LNG transfer operations can recommence.
Corrective actions
To return to normal operations, Freeport LNG must take a number of corrective actions, undergo inspections and receive approval from the PHMSA Southwest Region Director, Office of Pipeline Safety. The corrective actions outlined by the PHMSA cover operating procedures, control systems procedures and assessment of personnel qualifications and training. Freeport LNG’s corrective actions must be certified by a qualified third-party. A root cause failure analysis outlining findings that led to the accident must also be submitted.
The third-party consultant will evaluate the facility’s LNG storage tanks’ operating modes including transfer to the loading docks, recirculating LNG throughout the transfer area, and loading tanks from the liquefaction trains, inspection and testing procedures for all control systems, and qualifications and training of operations, maintenance and supervisory personnel.
In response to the incident on 8 June, Freeport LNG said it has worked with all local, state and federal officials on the incident response, investigation and safe resumption of liquefaction operations. “We will continue to do so, particularly with PHMSA, the Federal Energy Regulatory Commission and the United States Coast Guard, to obtain the necessary approvals to safely restart operations. A comprehensive review by Freeport LNG is already underway to ensure all necessary corrective actions are identified and fully implemented prior to resuming operations.”
Freeport LNG estimated resuming partial liquefaction operations by early October 2022, with the expectation “to deliver substantially all baseload production volumes. At this time, we continue to target year-end for a return to full production.”
Lowering US LNG export capacity
The accident at the Texas export facility comes at a time when LNG producers are going flat out to meet demand during the global energy crisis. Freeport’s LNG export facility has three LNG storage tanks and three liquefaction trains, each capable of producing 4.4 mta of LNG.
“The future of global LNG supply is a key concern given the scarcity of today’s market,” said Poten & Partners, commenting on current market conditions. “High prices have incentivised LNG producers to maximise operations and produce above-nameplate capacity but that is still not enough to satiate consumers on the demand side of the equation. The US is forecast to lead the way in terms of supply growth between 2022 and 2024 with exports rising by 11.4 mta from 79 mta in 2022 to 90.3 mta by 2024.
Freeport LNG is one of seven LNG export facilities in the US, following the startup of production at Venture Global LNG’s Calcasieu Pass LNG in Cameron Parish, Louisiana.
“Without the outage at Freeport LNG, US exports could have reached roughly 85 mta this year,” observed the energy analysts.
Poten & Partners forecast that demand from Europe for LNG will drop 19 mta between 2022 and 2024. “The assumption in Europe is that pipeline imports will increase /or natural gas demand will decline due to the substitution of alternative energy sources.”
Conversely, the energy analysts expect demand in Asia to strengthen in 2024, with northeast Asian imports climbing by 19 mta and south and southeast Asian LNG imports rising by a combined total of 22.5 mta.
“South and southeast Asia are anticipated to see the most growth in LNG demand at 34% and 52%, respectively. Population and economic growth are forecast to be key drivers of natural gas demand growth in Asia in the power sector and LNG will play a critical role in meeting those needs,” said Poten & Partners.
