Freeport LNG Terminal

From Global Energy Monitor
This article is part of the Global Fossil Infrastructure Tracker, a project of Global Energy Monitor.
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Freeport LNG is an LNG import terminal in Freeport, Texas. New LNG trains for export are under construction at the terminal.

Location

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Export Project Details, Trains 1-3

  • Owner: Freeport LNG Development[1]
  • Parent: Zachary Hastings, Osaka Gas, Dow Chemical Company, Global Infrastructure Partners, Freeport LNG[1]
  • Location: Freeport, Texas, United States
  • Coordinates: 30.366324, -81.626135 (exact)
  • Capacity: 15.3 mtpa (5.1 mtpa per train)[1]
  • Status: Operating[2]
  • Type: Export
  • Trains: 3[1]
  • Financing: Initial project financing in 2014 from Japan Bank for International Cooperation (UD$2.6 billion) and from various Japanese commercial banks and Dutch bank ING (US$1.67 billion), with the private financing portion insured by Nippon Export and Investment Insurance (NEXI)[3]
  • Start Year: 2019[1]

Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day

Export Project Expansion Details, Train 4

  • Owner: Freeport LNG Development[1]
  • Parent: Zachary Hastings, Osaka Gas, Dow Chemical Company, Global Infrastructure Partners, Freeport LNG[1]
  • Location: Freeport, Texas, United States
  • Coordinates: 30.366324, -81.626135 (exact)
  • Capacity: 5.1 mtpa[4]
  • Status: Construction[1]
  • Type: Export
  • Trains: 1
  • Start Year: 2020[1]

Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day

Import Project Details

  • Owner: Freeport LNG Development[1]
  • Parent: Zachary Hastings, Osaka Gas, Dow Chemical Company, Global Infrastructure Partners, Freeport LNG[1]
  • Location: Freeport, Texas, United States
  • Coordinates: 30.366324, -81.626135 (exact)
  • Capacity: 13.2 mtpa[5]
  • Status: Unknown
  • Type: Import
  • Start Year: 2008

Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day

Background

Freeport LNG Development, L.P. designed, built and operates the Freeport LNG import terminal in Freeport, Texas. ConocoPhillips bought two-thirds of the capacity of Freeport LNG and Dow Chemical the remaining third. Construction began in 2005 and was completed in 2008.[6]

After the US fracking boom, Freeport LNG filed two DOE applications, each for 511 Bcf/year in December 2010 and 2011, and received approval from DOE to export LNG to Free Trade Agreement countries in February 2011 and 2012. In December 2010, Freeport LNG also submitted a pre-filing request with FERC to begin the environmental review of the liquefaction project. The project would transition the import terminal into an export terminal.[6]

Freeport LNG intends to file its formal application pursuant to Section 3 of the Natural Gas Act (NGA) by August 2012 and will request that FERC authorize by 2013. Freeport LNG anticipates a construction schedule of approximately three to four years, beginning in early 2017.[6]

In April 2015 Freeport LNG secured the final piece of financing for its $12.5 billion liquefied natural gas export terminal, placing the company on track to begin producing by early 2018 and fully operational by 2019.[7] Since the initial project finance support, Trains 1 to 4 have been supported via multiple bond issues and refinancing deals running into several billion dollars which have been provided and facilitated by a wide range of international commercial banks, most commonly the Japanese banks Mitsubishi UFJ Financial Group, Mizuho and Sumitomo Mitsui Banking Corporation.

On May 17, 2013, the DOE gave the green light to Freeport LNG Expansion and FLNG Liquefaction’s proposal to send 1.4 billion cubic feet per day of natural gas overseas for 25 years, allowing export to nations that do not have a free-trade agreement with the U.S. The decision came less than 24 hours after the Senate confirmed Energy Secretary Ernest Moniz, author of a 2011 MIT report on natural gas that advocated its export.[8]

Construction of the export terminal started in late 2014. The first three production trains will add approximately 15 million metric tonnes per year (mtpa) of nominal liquefaction capacity to the Quintana Island terminal facilities. An additional LNG train (Train 4) is under development.[9] In September 2019 Freeport LNG secured a loan of approximately US$1 billion from Westbourne Capital, an Australian investment manager, to cover the cost of Train 4 construction. The final investment decision (FID) for Train 4 was expected to be achieved in 2020.[10] As of February 2019, construction for the export terminal was ongoing, and pre-commissioning had begun for Train 1.[11] By February of 2020, Freeport LNG had begun shipping cargoes, suggesting that the export terminal is operational.[2]

As of February 2020, the commissioning of train 4 wasn't expected until 2024.[12] In April 2020, the energy and shipping brokerage Poten & Partners disclosed that the FID for Train 4 had been delayed beyond the original FID timing of 2020. It cited COVID-19, plunging demand and the crash in oil prices as the reasons for the delay. [13] In May 2020, Train 3 commenced commercial operations marking the full commercial operation of the three-train facility.[14]

In August 2020, Reuters reported that Freeport LNG had asked FERC for an additional three years until May 2026 to complete Train 4. According to a Freeport spokesperson, “Given the current market conditions resulting from COVID-19, Freeport LNG does not expect to reach FID on Train 4 this year, we can be ready to start construction by mid-2021, if market conditions improve.”[15]

Articles and resources

References

  1. 1.00 1.01 1.02 1.03 1.04 1.05 1.06 1.07 1.08 1.09 1.10 2020 World LNG Report, page 102, International Gas Union, April 27, 2020
  2. 2.0 2.1 U.S. weekly LNG exports for third week running LNG World News, February 21, 2020.
  3. Project Financing for Freeport LNG Project in U.S., Japan Bank for International Cooperation press release, Oct. 30, 2014
  4. Freeport LNG’s Train 1 start-up delayed LNG World News, April 20, 2018.
  5. The LNG Industry: Annual Report 2020, page 48, International Group of Liquefied Natural Gas Importers, accessed April 29, 2020
  6. 6.0 6.1 6.2 "Freeport LNG Export project," Freeport LNG Development, accessed April 2012.
  7. "Massive Freeport LNG project chugs forward with $12.5 billion in its back pocket" Fuel Fix, Rhiannon Meyers, April 28, 2015.
  8. Zack Colman, "DOE gives green light to controversial natural gas export project," The Hill, May 17, 2013.
  9. Freeport LNG: Taking U.S. Natural Gas Global Freeport LNG, accessed July 16, 2019.
  10. Harry Weber, Freeport LNG sees loan deal as lift to Train 4 expansion prospects, S&P Global, Sep. 9, 2019.
  11. From Land to Liquefaction: Pre-commissioning is here The Isle Magazine, February 2019.
  12. US hopes for robust second wave of LNG supply could dim: Freeport LNG’s Smith Hellenic Shipping News, February 14, 2020
  13. John Snyder FID’s delayed by global uncertainty Riviera Maritime Media, Apr. 24, 2020
  14. Freeport LNG starts Train 3 operations, Riviera Maritime Media, May 6, 2020.
  15. Scott DiSavino, Freeport seeks more time to build Train 4 at LNG export plant in Texas, Reuters, Aug. 3, 2020.

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