Freeport LNG Sues 3 Contractors for Ongoing Reliability Issues
We’ve been tracking the up down up down up down situation at Freeport LNG since it came online in 2019. Freeport was mostly offline this year following an episode of cold temps in January (see Freeport LNG Repairs Won’t be Done Until May – 2 Trains Offline). Freeport announced that two of its three trains (Trains 1 and 2) would remain out of service for testing and repairs through May. Train 3 came back online in late March, but just as quickly, it went down again. Then came back up. Then went down. Etc. As of Friday, April 26, Train 3 was down again. Then, several weeks ago, in mid-May, Reuters reported a miracle of miracles — all three trains were back up and running (see Problem-Plagued Freeport LNG Fully Online Again … For Now). And then, two weeks ago, Train 2 went down again, briefly. Just coming to light now, Freeport (in April) sued three contractors who worked on the facility, blaming them for the ongoing, systemic problems.
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Why are we not surprised? We’ve been tracking the up down up down up down situation at Freeport LNG since it came online in 2019. Freeport was mostly offline this year following an episode of cold temps in January (see 
Earlier this month, MDN brought you the great news that New Fortress Energy’s (NFE) proposed Wyalusing LNG export plant (in Bradford County, PA) and a docking facility in Gibbstown (in New Jersey, along the Delaware River) to load ships with PA-produced LNG, are not dead yet (see 
In January, President Biden announced he would “pause” any approvals for new LNG export plants (currently 17 requests in the pipeline) for at least one year while his people fart around pretending to figure out how to measure global warming as a new consideration for whether or not to approve projects (see 
LNG (liquefied natural gas) that is exported from the U.S. to Asia takes one of three routes to get there. One route is via the Panama Canal, crossing into the Pacific Ocean and on from there. Another is via the Atlantic Ocean to the Suez Canal and from there via the Red Sea, which connects to the Indian Ocean. The third way is sailing through the Atlantic Ocean and around the Cape of Good Hope off the southern tip of Africa. In the past, both the Panama Canal and the Suez Canal were the preferred routes, shaving weeks from the journey. However, given recent events, the dynamic has completely changed. Now, the preferred route is the longest route — around the Cape of Good Hope.
In 2020, Congress mandated a report from the National Academies of Sciences, Engineering, and Medicine to assess the U.S. Coast Guard’s ability, methods, and role in conducting the certificate of compliance (COC) program for the foreign-flag tanker ships known as liquefied gas carriers (LGCs) and to consider the need for statutory reforms. The National Academies released its report yesterday with recommendations for how the Coast Guard can and should update its LNG carrier certification program.
Although the weakened Bidenistas signaled they would consider lifting the political “pause” on approving new LNG export projects if Congress would vote to grant HUGE piles of money for the wars in Ukraine and Israel, and even though Republicans had the Bidenistas on the ropes, at the last minute the GOP didn’t press the advantage and voted in favor of the aid package without requiring Biden to lift the LNG pause. It is a shame and a wasted opportunity. So what happens now? The so-called LNG review goes forward, and new global warming criteria will be used (at least during the Biden administration) to evaluate new LNG export projects.
On the demand front, we’ve been tracking the up down up down up down and now up again situation at Freeport for weeks (months, years). Freeport had been mostly offline following an episode of cold temps in January (see 
According to Energy in Depth, opposition to the Rockefeller-backed LNG export “pause” keeps pouring in from Republicans and Democrats alike. Last week, eight “moderate” (i.e., desperate) Democrat members of Congress sent a letter to President Biden requesting regular updates on the Dept. of Energy’s evaluation of LNG exports and more clarity on the timeline of the pause. The sycophantic Dems refused to condemn Biden’s overt action to harm American energy. However, they did “urge” him to “bring about a swift end to the LNG export permit pause” and to ensure “that any regulatory changes be incorporated in an open and transparent means.”
American LNG exports are a true success story. We have shale drilling to thank for LNG exports. The U.S. went from importing LNG a few short years ago to exporting 11.9 billion cubic feet per day (Bcf/d) of LNG in 2023. But baby, you ain’t seen nothin’ yet! U.S. LNG exports in 2024 are forecast to hit an average of 14 Bcf/d. And because of facilities currently under construction or will soon be under construction, U.S. LNG exports are forecast to hit an average of 25 (!) Bcf/d by 2028, some 80% more than this year!
The NYMEX futures price for natural gas has been trending higher lately. It closed down a nickel on Friday, but overall, the trend has been up, up, and away. Since price is so important, we cover the topic frequently. Lately, we’ve made the following points (in various posts): (1) Natural gas production is declining, thanks to drillers like EQT, Chesapeake, and Antero curtailments. (2) LNG export demand is increasing with Freeport back online and a couple of new plants coming online soon. Both of those factors combine to drive the price higher. However, there’s another factor at work to keep prices lower.
Last year in March and then again in May, New Fortress Energy (NFE) confirmed to the Securities and Exchange Commission (SEC) that it plans to apply for updated permits to build an LNG export plant in landlocked northeastern Pennsylvania (see 
Have you noticed? The NYMEX price of natural gas has been on an upward trend over the past week or so. We’ve actually broken the $2 barrier, and it continues to climb. Which begs the question, why? There are typically a number of factors combined to drive the price. This time around, we think we can boil it down to a classic economics principle — there’s more demand and less supply. The demand is coming from the problem-plagued Freeport LNG facility, which is rockin’ and rollin’ once again. Lower supply is coming from fewer natgas drilling rigs in operation.
According to S&P Global and its crack statistics unit, U.S. liquefied natural gas (LNG) and liquefied petroleum gas (LPG, mostly propane) exports both hit new all-time record highs for the period of Jan. 1 through April 29 this year. And that’s despite the fact that the Freeport LNG export facility has experienced a major outage since January. And speaking of the problem-plagued Freeport facility, one of its three trains, Train 3, received around 830 MMcf of natural gas yesterday. Meaning it’s back online. Finally. Up down, up down, up down. Now, up again.
According to a Bloomberg article, Venture Global LNG Inc. expects to begin production at its second liquefied natural gas export facility in Louisiana in mid-2024. The new facility is called Plaquemines LNG, located in Plaquemines Parish, Louisiana, approximately 20 miles south of New Orleans. Venture Global has asked the Federal Energy Regulatory Commission (FERC) for permission to import up to three LNG cargoes to test the facility before it’s ready to go. But then, will Venture Global claim it’s not ready for another 2+ years as they have with its first facility, the Calcasieu Pass LNG export facility in Cameron Parish, Louisiana?