US LNG production problems hit critical moment

Production problems at two of the export terminals of gas natural licuado (GNL) bigger than USA They threaten to cut shipments just as an energy crisis hits Europe and Asia, where buyers are desperately trying to replenish inventories before winter hits.

Freeport LNG is experiencing wax build-up in its pipes due to impurities in the gas it receives, said people with direct knowledge who asked not to be identified. As a result, LNG shipments from the Texas export terminal will be reduced for the rest of October and November, the people said. Freeport officials declined to comment.

Located approximately 60 miles south of Houston, the LNG plant is powered by company-owned gas pipelines connected to a pair of facilities near the city of Oyster Creek, records from the Texas Railroad Commission show. Gas flows to the terminal were down nearly 9.5% from the previous day, BloombergNEF estimates show.

Despite the slowdowns, the installation is still loading and exporting. An oil tanker named Corcovado LNG left Freeport on Friday morning and is heading to Poland with a shipment, shipment records compiled by Bloomberg show. Another tanker is docked at the terminal while three more remain anchored and waiting in the Gulf of Mexico.

Meanwhile, a production unit known as Train 3 at Cheniere Energy Inc.’s Sabine Pass LNG export terminal is down due to mechanical problems, but the situation is not as dire as Freeport’s, people with direct knowledge said.

The company has no comment on the operations, a Cheniere spokesman said in an email.

Gas flows to the plant were down 21% from the previous week, figures from BloombergNEF show. The plant’s shipping channel was closed for part of the day Thursday due to fog. An LNG tanker was docked at the plant on Friday morning while two more are anchored and waiting in the Gulf of Mexico.

The problems at the two LNG export terminals, which together account for more than half of US production, come at a time when European and Asian buyers are looking to accumulate inventories before winter and pay nearly six times natural gas prices in the US.