• Freeport LNG is the second-largest LNG exporter in the United States.
• The Texas facility was shut down on June 8, 2022, after a pipeline explosion.
• The company has now permission to start cooling down parts of the plant’s piping systems.

Federal authorities gave Freeport LNG, the second-largest LNG exporter in the United States, permission on Thursday to begin the process of restarting its Texas LNG export facility that has been shut down due to a fire.

To restart the liquefaction trains that convert natural gas into LNG for export, Freeport has not yet applied for approval. The federal regulators will need to receive a request later on for the restart of LNG production.

Energy analysts have stated that they continue to anticipate that the majority of the plant’s output will be shut down until March or later.

After a pipeline explosion on June 8, 2022, the tightly held LNG company’s plant was forced to shut down. It wasn’t possible to restart operations until federal officials had finished a comprehensive safety study and approved any improvements.

Freeport’s request to start cooling down sections of the plant’s piping systems was approved by the US Federal Energy Regulatory Commission (FERC) and the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA).

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A first stage in getting the plant back to normal operations following a seven-month outage would be the procedure to cool down the pipes, which Freeport estimated would take around 11 days.

“additional authorization to restart operations is necessary to reinstate service … of the liquefaction trains,” the FERC stated in its filing.

US gas futures had fallen over 10% to a 21-month low of $2.76 per million British thermal units before the regulators’ ruling on Thursday. Futures reduced some of their losses on the approval news, although they remained down by roughly 7%.

The market anticipates price hikes as gas demand grows following the plant’s restart.

When running at full capacity, the facility can take in roughly 2.1 billion cubic feet of gas per day (bcfd).

Large clients affected by the outage, notably JERA and Osaka Gas, were forced to report damages of hundreds of millions of dollars. SK E&S, TotalEnergies, and BP are some of its other significant buyers.

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