Freeport LNG is experiencing a wax buildup in its pipelines 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 remainder of October through November, the people said. Freeport officials declined to comment.
Located roughly 60 miles south of Houston, the LNG plant is fed by company-owned pipelines that run from a pair of company-owned facilities near the City of Oyster Creek, Railroad Commission of Texas records show. Gas flows to the terminal were down nearly 9.5% from the previous day, estimates from BloombergNEF show.
Despite the slowdowns, the facility is still loading and exporting. A tanker named Corcovado LNG left Freeport on Friday morning and is headed to Poland with a cargo, shipping records compiled by Bloomberg show. Another tanker is docked at the terminal while three more are 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 issues but the situation is not as serious as Freeport, people with direct knowledge said.
The company does not comment on operations, a Cheniere spokesperson said in an email.
Gas flows to the plant are down about 21% from the previous week, BloombergNEF figures show. The ship channel for the plant was shut part of the day on 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 issues at the two LNG export terminals — which together account for more than half of U.S. production — come at a time when European and Asian buyers are seeking to build inventories ahead of winter and are paying nearly six times the prices of natural gas in the U.S.