US natgas futures down on weather forecast

NEW YORK: US natural gas futures held near a 25-month low on Monday as rising output and forecasts for warmer weather and lower demand next week than previously expected offset a colder outlook with more heating demand for this week.

That lack of price movement came despite a growing belief that Freeport LNG’s export terminal in Texas will soon start pulling in more gas to produce liquefied natural gas (LNG). Analysts, however, have said they still do not expect Freeport to return to full LNG production until mid-March or later.

Meteorologists forecast the weather would remain mostly warmer than normal through Feb. 20 except for a few colder than normal days around the Feb. 18-19 weekend. Traders noted cold on the weekend does not have the same impact on usage as cold during the workweek because usage is low on weekends when many businesses shut.

Freeport LNG told Texas state regulators last week that it would start sending gas to one of three liquefaction trains at its long-shut export plant.

The plant is waiting for permission from federal regulators to start loading LNG to free up space in its storage tanks. The liquefaction trains turn gas into LNG for export.

Freeport, the second-biggest US LNG export plant, shut after a fire in June 2022. The energy market expects gas prices to rise once the plant starts producing LNG again.

When operating at full power, Freeport can turn about 2.1 billion cubic feet (bcf) of gas into LNG each day. That is about 2% of total US daily gas production.

Federal regulators will hold a public meeting on Freeport on Feb. 11 to provide members of the community and other interested parties an opportunity to voice their concerns about Freeport’s restart plans and get an update on what’s happening at the plant.

Even though some vessels have turned away from Freeport in recent weeks, including possibly the Prism Courage, several tankers were still waiting in the Gulf of Mexico to pick up LNG from the plant, including Prism Agility (Jan. 2), Prism Brilliance (Jan. 26), Kmarin Diamond (Jan. 26) and Nohshu Maru (Jan. 31).