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Freeport LNG's slow restart after Beryl has created a Texas tanker bottleneck.

Posted to Maritime Reporter on July 23, 2024

Shipping data released on Thursday shows that the number of LNG tankers waiting at Freeport LNG, Texas, has increased since last week when the U.S.'s second largest LNG exporter halted its processing in preparation for Hurricane Beryl.

Beryl hit Texas on July 8, near Matagorda. It caused damage to infrastructure and left over 2 million people without power for days.

Freeport and other coastal cities have suffered from wind damage, and the restoration of power has been slow.

Freeport LNG has been slow to restart its operations since it shut down three of its liquefaction train on 7 July and reported wind damage.

The LNG exporter announced on Monday that it will restart one processing train next week, and the other two shortly thereafter. Production will be reduced as it continues its repairs.

U.S. Gas Futures dropped about 7% to a 10 week low on Monday after it became apparent to the market Freeport LNG will likely continue to run at less than maximum capacity for several days.

According to LSEG, on Thursday, the facility increased production and was expected to use more gas. It is now estimated to be using 500 million cubic foots of gas compared to 400 mmcf used on Wednesday.

The loading of vessels has not yet resumed. According to LSEG, six LNG tankers were anchored in the vicinity of the port. Some of these vessels had accumulated more than 10 day's wait.

A source familiar with Freeport LNG's operations stated that as of Thursday, the company had not issued any instructions to bring in tankers, despite some vessels being scheduled.

Brazos Pilots association said that the Port of Freeport reopened its navigation channel last week, but there are still draft restrictions on vessels.

Cargo cancellations are often caused by long waits for vessels with back-to-back contract.

Bloomberg, citing traders who are familiar with the issue, reported that Freeport LNG had canceled 10 cargoes scheduled to be loaded through August.

Freeport LNG announced on Thursday that it would not comment about its commercial activities, including cargoes. Reporting by Marianna Pararaga, Curtis Williams, and Arathy S. Somasekhar Editing done by Marguerita C.

Tags: Marine Services North America Port Services Transportation Central America