The administration of President Joe Biden is preventing America's second-largest liquefied natural gas (LNG) plant from restarting operations after it was forced to shut down due to a fire in June over alleged "risks to public safety."
On June 8, an unexplained explosion knocked out Freeport LNG's plant in Quintana, Texas, after the blast caused a fire that spread through a large part of the plant. This facility is responsible for bringing America over two billion cubic feet of LNG per day and 16.5 million tons of LNG per year. (Related: Freeport Liquefied Natural Gas terminal down for the ENTIRE YEAR due to pipe explosion.)
"Continued operation of Freeport's LNG export facility without corrective measures may pose an integrity risk to public safety, property or the environment," wrote the Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) in its preliminary report.
The report stated that the explosion was caused by a safety valve that led an 18-inch pipe with inner and outer stainless steel layers to overpressurize. A 300-foot section of pipe burst due to the pressure, releasing about 120,000 cubic feet of LNG and methane into the facility and causing the explosion and the fire.
The PHMSA claimed a more thorough investigation into what caused the disaster is needed. This root cause analysis will delay a planned partial restart of the plant for 90 to 120 days and could also significantly delay a full restart.
Freeport LNG plant likely to miss restart target
In a statement, Freeport said it would work to obtain the necessary approvals from regulators. PHMSA has ordered Freeport LNG to submit a plan for an independent investigator to provide a report on the extent of the damage to the facility.
Freeport is also ordered to hire a third party to review the state of the company's LNG storage tanks.
After all of the reviews of Freeport's facilities are completed, the company can submit a plan to repair the damage to the PHMSA. The company is hoping to partially restart operations by September to early October and full operation by the end of the year. The government's demands on the company will likely make the company miss its goals.
"The actual process [of reviews, repairs and approvals] will take longer than three months, and potentially take six to 12 months," said Alex Munton, director of global gas and LNG at the consulting firm Rapidan Energy Group.
The explosion affecting Freeport LNG came as the world is experiencing a shortage of LNG. The forced closure of the Quintana plant has already affected an estimated 14 percent of American LNG exports.
The monthlong outage has also sent natural gas prices in the country to tumble by 33 percent in June – the biggest monthlong price drop since 2018 – adding even more unwanted pressure on global gas prices at a time of already limited supply.
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