Freeport LNG Plant to Require Full US Approval Before Partial Restart

The second-largest U.S. liquefied natural gas export plant, idled for five months by a fire, must receive full approvals before a planned November restart can begin, regulator Pipeline Hazardous Materials and Safety Administration (PHMSA) said on Wednesday.

Full approval adds to the hurdles for restarting Freeport LNG, one of the earliest and biggest U.S. export facilities. The closely-held company aims to restore more than 85% of pre-fire processing capacity next month and complete repairs to bring the facility back to 100% by March.

Contractors and investigators have been swarming the massive Texas Gulf Coast plant where on June 8 compressed gas pipelines burst and exploded into a fireball, a blast blamed on a stuck safety valve and human error.

PHMSA will not authorize a partial restart until all the company's proposed changes are received and accepted, the spokesperson said. The regulator so far has approved only pieces of Freeport's proposed changes, called a remedial work plan.

The plant's restart will provide needed fuel for heating and power as winter descends on the Northern Hemisphere. Freeport LNG processes about 2 billion cubic feet per day of natural gas and exports up to 15 million tonnes of LNG per year.

"The risk is PHMSA saying 'we'd like all the damage repaired before the restart'" as part of its final approval, said Alex Munton, director of global gas at researcher Rapidan Energy Group. "Come November, it is not going to be a question of whether Freeport can or wants to restart, it is going to be their (PHMSA) decision."

Work at the Texas site is progressing, said Freeport LNG spokesperson Heather Browne. Plant staff and contractors are focused on "final repair and restoration efforts, completing work plans and obtaining the necessary regulatory approvals," she said.

Lead regulator PHMSA in a June order had said it could authorize the company's remedial work plan (RWP), "without approving the entire RWP." PHMSA is in charge of a review that includes the U.S. Coast Guard and Federal Energy Regulatory Commission.

Global LNG prices have cooled with Europe's depleted gas storage levels returning to 92% of targeted capacity this week. Prices at the Dutch hub this week fell to $40 per million British thermal units, the lowest level since June.

(Reuters - Reporting by Gary McWilliams; editing by Richard Pullin)