It is highly possible that the restart of U.S. Freeport's LNG plant will be delayed beyond a scheduled date of mid-November, the president of Osaka Gas Co. Ltd. said on Nov. 18, adding that it had not restarted yet.
Osaka Gas, which buys 2.32 million tonnes of LNG annually from the project, understands construction work is on track but regulatory approvals from local authorities may be delayed, president Masataka Fujiwara told reporters, but gave no date for the restart.
A blast and fire on June 8 had knocked out Freeport LNG's 15 million tonnes per year Quintana plant, exacerbating global LNG shortages amid reduced gas flows from Russia.
RELATED
Texas Freeport LNG Restart Delay Causes Vessels to Seek Other Ports
Freeport had said repeatedly that the plant was on track to return to service in November.
"With a conservative view that the November restart might be difficult, we had been working to secure LNG for a longer period," Fujiwara said, adding a further downward revision to its earnings forecast is not in its scope.
Last month, the city gas provider cut its net profit forecast for the year to March 31 to 29 billion yen ($207 million) from 31.5 billion yen, while increased the anticipated impact on recurring profit from the disruption at Freeport to 109.5 billion yen from its August estimate of 79.5 billion yen.
The Freeport shutdown has forced customers to buy expensive LNG from other sources.
As a shareholder of Freeport, Osaka Gas has no plan to take any legal action to seek compensation, Fujiwara said.
"We appreciate Freeport's efforts to lobby the regulatory authorities and advance the construction as quickly as possible," he said.
Looking at next year, Osaka Gas expects a tight global LNG market as Europe needs to buy more LNG to replace Russian gas.
"The spot LNG prices could rise after spring, so we will keep our long positions [in terms of LNG procurement] to avoid purchases of spot supplies," he said.
Recommended Reading
Exxon Mobil, Chevron See Profits Fall in 1Q Earnings
2024-04-26 - Chevron and Exxon Mobil are feeling the pinch of weak energy prices, particularly natural gas, and fuels margins that have cooled in the last year.
TotalEnergies to Invest $400MM in LPG
2024-05-14 - TotalEnergies is investing more than $400 million into LPG to provide more than 100 million people in Africa and Asia access to clean cooking methods by 2030.
Petrobras CEO Prates to Step Down
2024-05-15 - Brazil’s President Luiz Inácio Lula da Silva has requested that Petrobras CEO Jean Paul Prates resign following a dispute over dividend payments.
Uinta Basin: 50% More Oil for Twice the Proppant
2024-03-06 - The higher-intensity completions are costing an average of 35% fewer dollars spent per barrel of oil equivalent of output, Crescent Energy told investors and analysts on March 5.
Canadian Natural Resources Boosting Production in Oil Sands
2024-03-04 - Canadian Natural Resources will increase its quarterly dividend following record production volumes in the quarter.