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More than a week after the storm made landfall, the Freeport plant still isn’t fully up and running.
As Hurricane Beryl roared ashore near Houston last week, it sent a resounding warning that US natural gas exports may face a long and tumultuous storm season.
With winds of about 80 miles (130 kilometers) per hour, Beryl made landfall July 8 near one of the Gulf Coast’s biggest liquefied natural gas plants, Freeport LNG. The storm left a trail of floods and devastation, and knocked out power to more than 2 million homes and businesses, including much of Texas’ biggest city.
More than a week later, Freeport still isn’t fully up and running. That should give pause to anyone around the world depending on US supplies.
For all of Beryl’s ferocity, it was only a Category 1 storm — the lowest level on the five-step Saffir-Simpson scale — when it hit Texas. Forecasters warn this hurricane season is apt to be monstrous, thanks to near-record warm waters in the Atlantic Ocean.
Five of America’s seven major LNG plants are located on the Gulf Coast, where every inch is vulnerable to hurricanes. Another five plants or expansions are under construction.
Freeport, the second-largest domestic plant in terms of capacity, can consume as much as 2% of all gas produced in the country on any given day. Rising power supply to the site indicates the restart process is underway.
But the facility itself was damaged by Beryl. How quickly it can recover to full production will have repercussions for gas prices in Europe and Asia, the primary destinations for US cargoes.
In the meantime, there are more than 100 days left in the hurricane season. It typically peaks around Sept. 10, just as traders are lining up supplies for winter.
They’ll be watching storm forecasts closely.
–Ruth Liao, Bloomberg News
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