NEW YORK: US natural gas futures rose about 3% to a five-week high on Friday, with the amount of gas flowing to US liquefied natural gas (LNG) export plants set to hit a daily record high and on forecasts for colder weather and higher heating demand in two weeks than previously expected.
The amount of gas flowing to LNG export plants was on track to hit a daily record high as Freeport LNG’s facility in Texas keeps pulling in more of the fuel after exiting an eight-month outage in February. The plant shut after a fire in June 2022.
Front-month gas futures for April delivery were up 6.9 cents, or 2.5%, to $2.834 per million British thermal units at 8:23 a.m. EST (1323 GMT), putting the contract on track for its highest close since Jan. 27.
For the week, the front-month was up about 16%, which would be its biggest weekly gain since late July. It rose about 8% last week. Freeport LNG’s export plant was on track to pull in about 1.4 billion cubic feet per day (bcfd) of gas on Friday, up from 1.2 bcfd on Thursday, according to data provider Refinitiv, a sign the company likely started the second of three liquefaction trains at the plant. Liquefaction trains turn gas into LNG.
When operating at full power, Freeport LNG, the second-biggest US LNG export plant, can turn about 2.1 bcfd of gas into LNG for export.
Freeport LNG said on Feb. 21 that it could be consuming about 2.0 bcfd of feedgas “over the next several weeks.” Some analysts have said that Freeport LNG will likely not return to full capacity until the end of April.
Federal regulators have already approved the restart of two of Freeport LNG’s three liquefaction trains (Trains 2 and 3). On Monday, Freeport LNG asked regulators for permission to restart the third (Train 1).
The total amount of gas flowing to US LNG export plants has risen to 13.4 bcfd so far in March from 12.8 bcfd in February. That compares with a monthly record of 12.9 bcfd in March 2022 before the Freeport LNG facility shut.
The seven big US LNG export plants, including Freeport LNG, can turn about 13.8 bcfd of gas into LNG.
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