Hurricane Beryl Aftermath Sees 10 Cargoes Canceled at Freeport LNG

Unnamed trading sources told Bloomberg on Thursday that loading through August had been canceled for at least 10 cargoes at Freeport LNG's gas export terminal in Texas after the facility was shut down following Hurricane Beryl. 

Traders not authorized to speak publicly on the matter told Bloomberg that the figure could rise further since the facility is not yet operating at full capacity. 

Preliminary data from BloombergNEF revealed that gas flows delivered by pipeline into Freeport on Tuesday were less than a third of normal volumes.

Europe's oil and gas multinationals, including French TotalEnergies SE (NYSE:TTE) and British BP Plc (NYSE:BP), are among the companies most severely hit by the outage. Affected companies, as well as their customers, are scrambling for replacements with traders predicting a prolonged outage will trigger a price rally in Europe and Asia

Traders are hoping that Freeport LNG will restart the facility soon with draft conditions into Freeport on Thursday reported at 39 feet, near-ideal conditions for fully-loaded vessels according to the Brazos Pilots Association. 

Currently, the plant is proceeding with its phased restart, with one of its three production units expected to come online in the current week according to Bloomberg. 

The gas outage has had little effect on prices so far: Europe's natural gas futures have held ground at €31-€32 per megawatt-hour, near their lowest levels since mid-May. The continent remains well supplied with storage facilities at 80% capacity as summer peaks. 

Meanwhile, gas flows from Norway have returned to normal levels, with no unexpected maintenance due to the holiday season. 

Gas demand remains muted thanks to the rise in wind farm output. However, the Freeport LNG situation in the U.S. as well as potential reduction in Russian gas flows through Ukraine remain potential bullish catalysts. Furthermore, any more delays to re-opening of France's Montoir LNG terminal could hit the supply side with the previous restart date of July 22 recently pushed back to August 1.

Freeport LNG declined to comment for Bloomberg.

By Alex Kimani for Oilprice.com

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