Freeport LNG expects its liquefaction facility to be shuttered entirely for at least 90 days, but full plant operations could be delayed until the end of 2022. The facility was shut down on Wednesday, June 8, in response to a fire. According to the company, the incident occurred in pipe racks that support the transfer of LNG from the facility's LNG storage tank area to the terminal's dock facilities located on the intracoastal (i.e., north) side of Freeport LNG's dock basin.
AEGIS notes that the longer the outage persists, the more bearish it becomes for the U.S. gas market. The facility consumed around 2 Bcf/d of gas before the outage, and now the gas has to find another home, most likely storage. The new information provided by Freeport LNG will certainly be causing analysts to adjust their forecasted end-of-season (when the gas balance flips from injections to withdrawals ~ which usually occurs in early November) number. At the very least, it seems the incident could be responsible for around 180 (90days*2Bcf - avg. facility demand) Bcf of gas available for storage, which needed help; inventories are quite low for this time of year, and much of the volatility in gas prices has been linked to the worry of insufficient supply for this winter.