Unidentified trading sources disclosed to Bloomberg on Thursday that at least 10 cargoes scheduled for loading through August at Freeport LNG’s Texas gas export terminal have been canceled due to the facility’s shutdown in the aftermath of Hurricane Beryl.
Potential for Further Cancellations Looms
Traders speaking anonymously to Bloomberg indicated that the number of cancellations could increase, as the facility has yet to resume full operational capacity.
Preliminary data from BloombergNEF showed gas flows delivered via pipeline to Freeport on Tuesday were less than a third of their typical volume.
European Energy Giants Feel the Impact
European oil and gas conglomerates, notably French TotalEnergies SE and British BP Plc, are among the companies most affected by the disruption. These companies, along with their customers, are scrambling to find replacements, with traders predicting a price surge in Europe and Asia if the outage is prolonged.
Traders are optimistic that Freeport LNG will quickly recommence operations, with draft conditionsat Freeport on Thursday reported at 39 feet, considered near-ideal for fully loaded vessels by the Brazos Pilots Association.
Phased Restart Underway
Currently, the plant is undergoing a phased restart, with one of its three production units expected to come online within the week, according to Bloomberg.
The gas outage has had minimal impact on prices to date: Europe’s natural gas futures have remained steady at €31-€32 per megawatt-hour, close to their lowest levels since mid-May. The continent’s storage facilities are well-stocked at 80% capacity as summer peaks.
Norwegian Gas Flows Return to Normal
Meanwhile, gas flows from Norway have returned to normal, with no unexpected maintenance interruptions due to the holiday season.
Gas demand remains subdued thanks to a rise in wind farm output. However, the Freeport LNG situation in the U.S., along with potential cuts to Russian gas flows through Ukraine, remain potential upward drivers for prices.
Additionally, further delays in reopening France’s Montoir LNG terminal, with the previous restart date of July 22 pushed back to August 1, could impact the supply side.
Freeport LNG declined to provide a statement to Bloomberg.