Freeport LNG, a major exporter of liquefied natural gas (LNG) in North America, is expected to extend its suspension of operations by reducing much-needed supplies to European and Asian consumers as winter approaches.
The company has told buyers it will have to cancel deliveries scheduled for November and December given that renovations are ongoing and regulatory approval is required for reopening, Bloomberg reported, citing sources close to the process.
The company’s export facility, located in Freeport, Texas, which accounted for about 15% of LNG supplies, has been shut down since June following an explosion and subsequent fire.
At a time when a cold wave is expected, this is not good news, and natural gas prices were rising this Monday with colder forecasts.
And this at a time when gas sales from Norway, Europe’s biggest exporter, are also suffering due to shutdowns at two important facilities.
The price of natural gas TTF, which is the “benchmark” for European markets and is discussed in Amsterdam, added 17.36% to 123.695 euros per megawatt hour (MWh).
After a long period of unusually mild temperatures in Europe, temperatures are expected to fall below average by the end of the week and are forecast to drop below freezing in Berlin, prompting people to start turning on heaters, boosting demand for gas.
In addition to gas, crude oil will also come under pressure, as the EU embargo — as part of the sanctions imposed on Moscow because of the war it has been waging in Ukraine since February 24 — on imports of Russian oil by sea comes into force from December 5.
