Freeport LNG has deferred its target on making a final investment decision (FID) on a fourth liquefaction train at its Texas export terminal amid challenging market environments caused by the coronavirus pandemic. The FID on whether to build the train is now targeted for at least 2021. Some other US LNG developers also delay final decision making on difficulties to sign new long-term supply contracts.
In February, CEO Michael Smith said the firm had no firm long-term contracts to Train 4. In 2018 Japan's Sumitomo signed a preliminary deal to purchase 2.2 million tons/year of LNG from Train 4. However, the agreement expired without being finalized.
Liquefaction utilization rates at the six major export terminals have plunged as buyers cancelled more shipments. More than 40 LNG cargoes for August loading have been cancelled. This follows cancellations of more than 45 shipments for July loading.
The cancellations mean US liquefaction terminals would take less gas. This week, gas intake by US liquefaction plants fell to its lowest since October last year. Declining feedgas flows can create a domino effect that will likely impact US midstream operators and shale gas drillers.
