LNG shipments from Freeport plant postponed again

Freeport has reported the cancellation of at least two gas shipments that were scheduled to leave Texas in late January and early February. The facility is scheduled to resume operations in the second half of this month.

Speculation about the plant's resumption date has caused a lot of volatility in the gas markets. The facility's capacity allows it to export roughly 2% of daily U.S. gas production. All production has been suspended for the seventh month. This delay means the volume of gas equivalent to all LNG exports from the U.S. in a month is made available for domestic consumption. This allocation has contributed to the accumulation of reserves and lower prices.

Last month gas prices fell more than 40%. That trend was driven by higher domestic inventories and lower demand due to the forecast of milder winter weather. Thus, the resumption of LNG exports could lead to higher prices by stopping the filling of storage facilities.

According to Wood Mackenzie Ltd, LNG tankers have listed Freeport LNG as their destination since Oct. 19, but most have moved to another terminal on the Gulf Coast since that time. 

Spokeswoman Heather Brown said Freeport is still in the process of reopening its plant in the second half of January.