Freeport LNG Trains Back on Track After Major Derailment

Pietro Pitts Hart Energy Tue, 06/13/2023

Freeport LNG’s three trains located at its export facility on Quintana Island off the coast of Texas are back online after a 10-month fire-related shutdown and to the appeasement of clients from France’s Total Energies to Japan’s Osaka Gas.

Most days, tiny Quintana Island on Texas’ Gulf Coast lures in visitors with a bird sanctuary, RV park and beaches. But, for worldwide attention, there’s no contest about the center of attention of the island located south of Houston: three liquefaction trains operated by Freeport LNG.

Economically, the trains make up a critical part of the U.S. LNG export infrastructure. Freeport’s 15 million tonnes per annum (mtpa) facility is the seventh largest in the world and second largest in the U.S. Its capacity is equivalent to 2.2 Bcf/d — enough to power and light a metropolitan area the size of San Antonio for a full day.

So, when something goes wrong in Quintana, the world tends to pay attention.

At 11:28 a.m. on June 8, 2022, something did. Freeport suffered a catastrophic failure in one of the facility’s lines that led to a vapor cloud explosion, with a fireball filling the sky.

An estimated 239,610 cf of methane gas was released into the atmosphere, with about 50% consumed in the fireball, according to a redacted report released in October by the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA).

A full year later, the Freeport accident highlights a time in which a single supplier could tip the scales of global markets—and continues to raise questions about the viability of the company’s planned, multibillion-dollar expansion on the island.

The incident reduced the export capacity of Freeport LNG, and the U.S. overall, at a time when European gas supplies were threatened by the Russia-Ukraine war. Prior to Freeport’s shutdown, U.S. LNG exports peaked in March 2022 at 11.7 Bcf/d, according to the U.S. Energy Information Administration (EIA).

By the time Freeport fully shut down, monthly U.S. exports declined by about 14.5% to an average 10 Bcf/d from June to December.

With Freeport back online, U.S. LNG exports are expected to exceed 12 Bfc/d, and the U.S. will remain the world’s largest LNG exporter, according to a March EIA report.

Freeport LNG pointed Hart Energy to its ‘Freeport LNG Sustainability and Community Investment Report 2022’ for details around the fire when questioned about the lessons learned from the incident.

On March 8, Freeport LNG received regulatory approval from PHMSA and the Federal Energy Regulatory Commission (FERC) to restart the final of its three trains.

Operations at Freeport LNG’s trains, as well as operations at two LNG storage tanks and a single dock, have allowed the company to again service its customers, the company said in its report.

“With the return to service of … the third LNG storage tank anticipated this summer, the full restoration of the facility is nearly complete,” Freeport LNG chairman, CEO and founder Michael Smith said in the report.

Freeport LNG’s restart is important for global LNG trade in general, and for off takers such as Total Energies, BP, Osaka Gas, JERA and SK E&S, which look to benefit financially from the resumption of gas flows.

Specifically, France’s Total Energies said during its first quarter of 2023 webcast that it expects operational benefits to positively impact its LNG sales in coming quarters. Japan’s Osaka surmised in a May press release that it will no longer have to rely on replacement LNG volumes.