US approves commissioning step for Freeport LNG Texas export plant
Freeport LNG’s $13 billion Freeport liquefied natural gas (LNG) export plant in Texas moved a step closer to entering service after federal regulators on Thursday approved a commissioning step for the plant.
The U.S. Federal Energy Regulatory Commission (FERC) approved Freeport’s request to introduce hazardous fluids to commission the liquefaction flare pilot system, a step in the process LNG terminals go through as they prepare for service.
The first train at Freeport is expected to enter commercial service in the third quarter, according to U.S. engineering firm McDermott International Inc, which is building the plant, and U.S. pipeline company Williams Cos Inc, which is building a pipe to connect the plant to the interstate gas system.
McDermott said it expects Train 2 to enter service in the first quarter of 2020 and Train 3 in the second quarter of 2020.
Officials at Freeport, the privately-held developer of the project, were not immediately available for comment.
Energy traders noted LNG terminals usually start producing LNG a couple months before entering commercial service.
Each train at Freeport will have the capacity to produce about 5 million tonnes per annum (MTPA) of LNG or around 0.7 billion cubic feet per day (bcfd) of natural gas. One billion cubic feet is enough gas to supply about five million U.S. homes for a day.
Freeport has 20-year contracts to sell LNG to Japanese gas company Osaka Gas Co Ltd and JERA - an alliance between Japanese power companies Tokyo Electric Power Co Holdings Inc and Chubu Electric Power Co Inc - from Train 1, British oil major BP Plc from Train 2 and Chinese chemicals company ENN Ecological Holding Co and South Korean energy company SK E&S from Train 3.
Freeport also has a three-year deal to sell 0.5 MTPA of LNG to multinational commodity trading firm Trafigura Group Pte Ltd starting in July 2020.
In addition, Freeport is developing a fourth 5-MTPA liquefaction train at the facility and could make a final investment decision on the train in the second quarter of 2019 with the plant entering service in 2023 or 2024.
Freeport has said it is working on a 20-year deal to sell 2.2 MTPA of LNG to a unit of Japanese trading firm Sumitomo Corp from Train 4.
Reporting by Scott DiSavino; Editing by Marguerita Choy
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