Freeport LNG plant pulls in natgas to produce power for Texas

(Reuters) - Freeport LNG said it was pulling in small amounts of pipeline natural gas at its shuttered liquefied natural gas (LNG) export plant in Texas to fuel a power plant.

The company has long said it expects the plant, which shut due to a fire on June 8, to return to partial service in October.

"Freeport LNG is currently drawing a small amount of gas off pipeline connections ... to fuel a gas-turbine generator at its natural gas pretreatment facility in order to generate and export about 50 (megawatts) of power to the state’s electricity grid," Freeport spokesperson Heather Browne said in an email.

Power demand in the Texas grid hit a record high for a third day in a row on Wednesday during a brutal heat wave.

Data provider Refinitiv said about 22 MM cf³d of gas has been flowing to the plant since July 19.

That compares with an average of 2.0 Bcf³d during the month before the plant shut after a fire and explosion on June 8.

Traders have said that if any gas was flowing to the plant - with such a small amount it could be phantom flows - it was likely to test some equipment.

Federal regulators, including the U.S. Federal Energy Regulatory Commission (FERC) and the U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA), have said they would not allow the facility to return to service until they approve the restart.

The shutdown of Freeport caused gas prices in Europe to jump about 40% in the following week because it reduced the volume of available LNG exports from the United States at a time when the world was short on gas supply.

(Reporting by Scott DiSavino; Editing by Kirsten Donovan and Jonathan Oatis)

• Most Read
• Most Commented