US Freeport Tests LNG Train [UPDATE]

The Texas Freeport LNG project has achieved sustained LNG production at the first of its four planned 5.10mn mt/yr liquefaction train, offtaker Jera said August 20. First LNG production was August 12, although it was originally planned for last year. The first deliveries come at a time of very low gas prices worldwide but the offtakers have tolling agreements which mean they can decide when to liquefy gas for export.

Osaka Gas and Jera each own 25% of the project through FLNG Liquefaction and the two are aiming for commercial operation in the fall of 2019. The other half of the project is owned by Freeport.

The two firms each have 20-year agreements for 2.32mn mt/yr of LNG, delivery free on board and free from destination restrictions. They are responsible for sourcing their own gas, from the US market. Trafigura has a three-year agreement for 0.5mn mt/yr. 

A final investment decision on Train 1 was taken in October 2014. The project operator is Freeport LNG Development. Osaka Gas and Jera say that they have, by participating in the project, contributed to its start-up, and intend to use the experience gained through operation of the project to expand their LNG businesses. Freeport LNG had been an LNG import terminal.

In a separate announcement, McDermott International, part of the joint venture engineering, procurement and construction (EPC) joint venture that includes Chiyoda International and Zachry Group, said Train 2 remains on track for initial LNG production in 4Q 2019 while Train 3 is on track for initial production in 1Q 2020.  A fourth train, also about 5mn mt/yr, is awaiting regulatory approval.

Two other US LNG terminals are also due on line in the coming months.