Agencies-Gaza post
LNG plant explosion cripples US gas exports
Explosion in Texas shuts down 20% of US LNG export capacity for at least three weeks
One of the largest US plants, which produces liquefied natural gas for export, was damaged by an explosion and fire, forcing the plant on the Texas Gulf Coast to shut down operations, which is expected to impact European and Asian markets.
“As a result of today’s fire, Freeport LNG’s liquefaction facility is currently shut down and will remain shut down for at least three weeks.” The company announced this on Wednesday evening and gave no further details.
Earlier in the day, the company confirmed one “Incident” However, at its Quintana plant, about 70 miles south of Houston, said none of the employees were injured and there was no risk to the community.
The exact cause of the fire and the extent of the damage are still unclear. After some witnesses reported a loud bang and a large fireball in the area, aerial footage from local TV stations showed firefighters at the facility, but there were no signs of open flames.
Was in the Freeport area all day for an “incident” at an LNG facility on Quintana Island. Freeport PD and witnesses say no doubt: It was an explosion. The fire/release has been contained and staff is on record. the investigation is ongoing. pic.twitter.com/8wuGEGAzb2
The Freeport facility subcools and liquefies about 2 billion cubic feet of natural gas per day or about 20% of the total US export capacity. Overall, US LNG exports totaled around 9.75 bcf per day in 2021, hitting a record 100 billion cubic meters this year. according to energy information management.
Some connections to the failure of a key US LNG facility: Almost 20% of all US LNG exports went through Freeport last month The US sent ~75% of its LNG to Europe from January to April, as well as Jera and Osaka Gas from Japan and SK E&S in Korea pic.twitter.com/UdT1ikLlcy
US local natural gas prices fell more than 6% on Wednesday, but the incident is expected to have the opposite effect and broader implications for global markets.
Europe, in particular, is already facing a major energy crisis due to the disruption in supply chains following the pandemic, as well as an unprecedented western sanctions campaign against Moscow. Despite efforts to cut ties, the EU still gets around 40% of its total natural gas imports from Russia, mostly through pipelines, after buying around 155 billion cubic meters in 2021.
Meanwhile, US exports to the EU totaled just over 22 billion cubic meters last year. President Joe Biden reportedly promised to increase LNG shipments by 15 billion cubic meters in 2022, but some analysts say the US is already producing the commodity at full capacity and that any additional gas sales to Europe will be taken from exports destined for others that would need buyers.
