US regulator bars Freeport LNG plant restart over safety concerns

Things have been getting steadily worse for the LNG export facility at Freeport in Texas. Initial hopes that the closure after a fire last month would last only a few weeks quickly became a confirmation that full production might not be resumed until the end of the year.

The US Pipeline and Hazardous Materials Safety Administration (PHMSA) has said in its preliminary report that Freeport, the second-biggest US LNG export facility, hit by fire earlier this month would not be allowed to repair or restart operations until it addressed risks to public safety, a pipeline regulator said on Thursday.

The fire on June 8th put Freeport LNG’s 15m tonnes per year (mtpa) Quintana plant out of action.

“Continued operation of Freeport’s LNG export facility without corrective measures may pose an integrity risk to public safety, property or the environment,” the PHMSA said.

A problem with a safety valve led an 18-inch pipe with inner and outer stainless steel layers to overpressurize and burst, releasing LNG and methane that caused the blast, PHMSA said in its report.

The regulator laid out a series of steps for investigating what caused the 300ft section of pipe to burst and release about 120,000 cubic feet of LNG. The root cause analysis likely will delay a partial restart of the plant for 90 to 120 days, and could delay a full restart, analysts said.

Freeport has said it would continue working with PHMSA and other regulatory bodies to obtain necessary approvals to restart operations. It had estimated a resumption of partial liquefaction operations to be in early October and a return to full production by the end of 2022.

Alex Munton, director of global gas and LNG at consultants Rapidan Energy Group, said that “the actual process (of reviews, repairs and approvals) will take longer than three months, and potentially take six to 12 months”.

The regulator ordered the company to submit a plan within 60 days for an outside investigator to provide a report on the extent of the damage to the facility. It did not say how long it would take to approve a plan. Freeport must also hire a third party to review the state of its LNG storage tanks.

Only after the reviews are completed will the company be allowed to submit a plan to repair the damage, the regulator said.