Full operations at Freeport LNG’s Quintana Island, Texas, will not resume until late 2022, following a fire at the facility, which will leave Europe scrambling to fill the LNG gap
Freeport LNG said the incident occurred at approximately 11:40 CT on 8 June, resulting in the release of LNG, leading to the formation and ignition of a natural gas vapour cloud, and subsequent fire at the facility. There were no injuries, Freeport LNG said.
The incident occurred in pipe racks that support the transfer of LNG from the facility’s LNG storage tank area to the terminal’s dock facilities located on the intracoastal side of Freeport LNG’s dock basin. None of the liquefaction trains, LNG storage tanks, dock facilities, or LNG process areas were impacted, Freeport LNG said in a press statement.
The fire was extinguished with the help of local emergency response personnel in about 40 minutes.
According to an incident report filed at the Texas Commission on Environmental Quality, the fire resulted in the release of carbon monoxide, NOx, particulate matter, sulphur dioxide and VOCs (non-methane). Freeport LNG said the release of these substances into the air was the result of burning piping insulation and cabling. Additionally, flaring occurred at Freeport LNG’s Pretreatment Facility due to the unplanned shutdown of Freeport LNG’s liquefaction plant.
An investigation is underway to determine the cause of the incident. One possible explanation of the incident suggested by Freeport LNG was an overpressure and rupture of a segment of an LNG transfer line, leading to the rapid flashing of LNG and the release and ignition of the natural gas vapour cloud. Additional investigation is underway to determine the underlying precipitating events that enabled the overpressure conditions in the LNG piping.
Repairs to return the plant to full operation are not expected to be completed until late 2022, said Freeport LNG. Resumption of partial operations is targeted to be achieved in approximately 90 days, once all regulatory clearances are obtained.
Europe to feel pinch?
With a nameplate capacity of 15 mta, the plant shutdown comes at a time when record US LNG exports are headed to Europe. The four top importers of US LNG in March were France at 64.4 billion cubic feet (bcf), Spain (59.2 bcf), the United Kingdom (56.8 bcf) and the Netherlands (24.9 bcf), according to the US Department of Energy.
Overall in March 2022, 118 US LNG cargoes were shipped during the month, amounting to 363.8 bcf, a 15% rise month-on-month from February and 13.4% increase year-on-year from March 2021. Of the 21 LNG cargoes shipped from Freeport LNG, 18 were landed in Europe, the UK and Turkey.
With Freeport LNG on the sidelines for months, Rystad Energy natural gas analyst Zongqiang Luo suggested LNG exporters in Africa could benefit.
“TheFreeportLNGblast spells trouble for Europe but opens a potentially lucrative opportunity for North and West African gas exporters to fill the gap,” said Mr Zongqiang . He said Europe “relies heavily on US export volumes which have accounted for approximately 45% of imports since the start of the year.
Freeportto Europe has been a popular route for vessels such as CorcovadoLNG, Yiannis, Maran Gas Andros, Prism Courage and Prism Brilliance that are chartered by JERA, Osaka Gas and SK E&S and are typically used to supply volumes to the Asian market.”
He noted with “favourable spot prices, countries such as Nigeria and Algeria that are producing well below capacity could increase production to help fill the void” left by Freeport LNG, which has supplied about 10% of Europe’s total volumes.
“Additionally, US uncontracted spot volumes from larger exporting facilities including Sabine Pass, Corpus Christi and Cameron LNGcould divert supply to Europe,” he observed.
