Dec 23 (Reuters) - Freeport LNG is once again delaying the restart of its long-shut liquefied natural gas (LNG) export plant in Texas, this time to the second half of January, the company said on Friday, extending an outage that began six months ago.
Freeport has pushed backed its restart target several times since the plant first closed on June 8 following a fiery explosion that a consultants report determined was due to inadequate operating and testing procedures, and human error and fatigue.
The company said in a statement that reconstruction work is substantially complete, but regulators need to approve the restart.
"Given the time needed for the regulatory agencies to review the company's responses and to seek any necessary clarification, Freeport LNG now does not anticipate commencing the initial restart of its liquefaction facility until the second half of January 2023," it said.
Freeport initially estimated it could restart in October.
U.S. LNG exports have been steadily increasing for years and the plant is one of a number of key facilities for shipments around the world, where demand has soared following Moscow's decision to largely cut off piped natural gas supply to Europe.
Freeport's plant can turn about 2.1 billion cubic feet per day (bcfd) of gas into LNG for export, about 2% of U.S. daily production.
The shutdown added to the squeeze on global gas caused by Russia's war. Prices in Europe and Asia hit record highs over the summer but U.S. futures stayed lower as the outage left more fuel in the United States for domestic use.
U.S. gas prices rose almost 5% Friday morning as a series of winter storms marching across the country cut output to a nine-month low, but futures were only around 3% higher by midday.
Both the U.S. Federal Energy Regulatory Commission (FERC) and the Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) have to approve Freeport's return to service.
Many analysts have long said they did not expect the plant to return until the first quarter because the company still has a lot of work to do to satisfy the regulators.
The closely held company said it was submitting responses to the last remaining questions included in FERC's Dec. 12 data request.
Small amounts of gas started to flow to Freeport this week for the first time since August, according to data provider Refinitiv. A source familiar with the matter said Freeport was using the gas to maintain a flare system.
The company did not say in its latest statement when it expects the plant to return to full power. In the past, it had indicated this could be in March 2023.
The lengthy delays have forced big customers including JERA and Osaka Gas to book hundreds of millions of dollars of losses. Its other big offtakers include BP, TotalEnergies and SK E&S.
Vessels have been waiting in the Gulf of Mexico to pick up LNG from Freeport since early November. Several other ships were expected to reach the plant in late December and January.
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