U.S. Natural Gas Prices Drop After Explosion At Freeport LNG Terminal

LNG

An explosion at a liquefied natural gas (LNG) export terminal in Texas has sent natural gas prices downward as emergency crews respond and details continue to flow in.

At 11:40 a.m. CT, an explosion rocked the Freeport oil and gas export terminal, with emergency response crews on the scene just over an hour later, according to media reports and Twitter accounts.

No injuries have been reported as of the time of writing, and the extent of the damage remains unclear.

“Freeport LNG has experienced some sort of explosion. Currently, we are NOT under any evacuation. Your Surfside Beach Police Department Marine Division is actively assisting Port Freeport and the US Coast Guard on the waterways,” the local police station said in a statement shortly after the explosion.

Authorities said an investigation was underway.

A local news channel released raw footage of the explosion.

The expert terminal, located on Quintana Island off the coast of Upper Texas, has three production units, or trains, to give the facility an LNG liquefaction capacity of some 15 million metric tonnes per year.  A fourth train has also been approved and is under development.

Overall, the Freeport terminal currently produces around 2 billion cubic feet per day of LNG.

Henry Hub natural gas was trading down more than 6% at the time of writing, in the aftermath of news of the explosion.

At 2:23 p.m. EST, Henry Hub natural gas prices were at $8.698, down 6.40%.

Earlier on Wednesday, natural gas prices hit a 14-year record. On Tuesday, natural gas futures rallied over 10% to close at $9.29. That brought natural gas prices to a 150% increase year-over-year.

U.S. exports have experienced a major rise in recent months amid a global energy crisis centered on Russia’s invasion of Ukraine and Western sanctions.

Source: Oilprice.com

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