Freeport LNG has resumed shipments of liquified natural gas (LNG) two weeks after Beryl hit the Texas coast, with processing on track to reach about half its capacity on Monday.
According to LSEG data cited by Reuters, the amount of gas flowing to the 2.1-billion cubic feet per day (bcfd) facility was on track to hit ~1.0 bcfd on Monday after averaging 0.8 bcfd on Sunday. Freeport has had a slow operational restart ever since it shut its three liquefaction trains on July 7.
Last week, unnamed trading sources told Bloomberg that loading of Freeport's LNG shipments through August had been canceled for at least 10 cargoes.
Europe's oil and gas multinationals, including BP Plc (NYSE:BP) and TotalEnergies SE (NYSE:TTE), are among the companies most severely hit by the outage. Affected companies, as well as their customers, have been scrambling for replacements with traders warning that a prolonged outage could trigger a gas price rally in Europe and Asia.
TTF Natural Gas Futures for August delivery were down slightly by 1.1% at $31.85 per megawatt-hour (MWh) at 11:45 a.m. in Amsterdam on Monday while Henry Hub gas prices surged 5.1% to $2.24/MMBtu. Europe's gas demand remains subdued thanks to a spike in wind farm output. However, the potential reduction in Russian gas flows through Ukraine remains a potential bullish catalyst.
Last year, Ukraine signaled it will not renew a five-year pipeline transit agreement to supply natural gas to EU countries when it expires at the end of the current year. EU energy chief Kadri Simson has, on the other hand, indicated that the EU executive has "no interest" in pushing to revive the agreement.
The EU has warned member countries to prepare to live without Russian gas, with Ukraine supplying 5% of total EU gas imports. Austria, Hungary and Slovakia are likely to be the hardest hit when the imports are cut off.
Lately, Ukraine has taken a stern stance against Russian energy commodities. Last week, Slovakia and Hungary reported they have stopped receiving oil from Russian Lukoil, after Ukraine imposed a ban on the transit of fuel from the Russian energy company via its territory.
By Alex Kimani for Oilprice.com
More Top Reads From Oilprice.com:
Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com. More