America’s third largest LNG export facility can’t seem to say out of the news and for all the wrong reasons. I have reported twice now on recent problems there and regretfully have another yet to add. Whereas it was reported in January that cold weather would shut down two of the three trains “for a few weeks”, it seems now that those estimates were a bit optimistic. Predictions now refer to operations being functional again by May’s end at best.

In late March, train 3 was back online, doing what it was designed to do. By April 10 it was announced that it would be taken offline again for an undetermined time. After the shut-down announcement, it had been off-line for at least a week when new projections arose declaring it will be down for service “through May”. Remember, this is a three-train facility that already had two trains shut down so it is effectively dormant as of today’s date. In fact, as of April 12, company officials described it as being “completely out of order”.

Freeport officials described the problems as “technical issues”, issues which caused US LNG exports to fall by almost 10% from January to February according to official figures. Those figures reflect the importance of just one of our available LNG facilities, with Freeport being the only one actually using grid-powered electric motors to compress and chill natural gas. Further, it was just announced this week that the facility has been approved to produce a bit over 16.5 MPTA of LNG. That’s if it can ever get, and stay, online and fully operational.

LNG is usually measured in volumetric units. In liquid form, it is typically measured in metric tons. It can also be measured in the amount of gas that it will provide when converted back to a gaseous form. Annual capacities of flow rates of facilities are often described in million tons per annum or millions of tons per year. Various abbreviations are used included MPTA, MMTY/year, or MMtpa.

As a reminder, the first two trains were shut down due to what was described as unusually cold temperatures. I find this curious with this winter being described my most as “mild”, causing natural gas deposits to rise and prices to drop. Everyone knows the price of methane is pitifully low, but when it, or similar natural gas mixtures are frozen, condensed, and sold overseas, the market is actually quite strong. Why? Well, likely the biggest factor is the Russian/Ukraine skirmish. Russia is ready, willing and able to sell to Eastern European and Western Asian countries and, without competition from American imports, they have a stranglehold on the market. Their pipeline system to bring gas to these markets is extensive and already in place.

Gas for needy consumers means money for weapons and armaments, items necessary to continue the war. Last year, for the first time ever, the US was recognized as the top LNG exporter in the world but with our third largest facility under constant repair, it may be difficult to reproduce such results.  Surely Freeport’s luck will change for the better and soon. If not, perhaps we need to reevaluate who is in charge and if their policies are contributing to the massive screw-up. Believe me, there is a lot of money to be made, along with the opportunity to help stymie Russia’s offensive vs. Ukraine. Lord knows, we are spending a ton of money at present trying to keep Ukraine afloat with billions upon billions being spent upon a war that is not even ours.

So how important is LNG regarding America’s energy policy?  Well, everybody knows the price of dry gas is next to nothing right now.  In fact, it has been depressed for quite some time now.  What a shame, considering the US has more natural gas reserves than any other country on the planet.  However, the EIA predicts, although LNG exports will only increase by 2% or so this year, it is expected to soar by at least an additional 18% by this time next year.  This is primarily due to three new export facilities coming on-line, but they are surely also counting on Freeport to work out its problems and contribute to the production.  America can, and will, profit greatly off LNG exports, when and if they can finally get their act together.

Reuters delivered some mixed news yesterday regarding Freeport.  It seems the State of Texas has just levied fines against the facility for violating state air pollution emission rules during the period between 2019 and 2012.  However, this  was tempered by news stating that gas is finally flowing to at least one of Freeport’s three trains.  Perhaps the other two will follow suit in the near future.  I will continue to keep on eye on happenings here, and report any newsworthy events that may occur.