Following an explosion at its Texas Gulf Coast facility, Freeport LNG, operator of one of the largest US export plants generating liquefied natural gas (LNG), will be closed for at least three weeks.
After assessing damage to the enormous facility, Freeport LNG, which produces roughly 20% of U.S. LNG processing, announced the shutdown late Wednesday.
Natural gas markets in the United States plummeted as traders expected the disruption to reduce domestic demand.
The market impact spread on Thursday, driving European gas prices up to a fifth higher as traders worried that missing US cargoes would add to the market's already-stressed supply situation.
"This is a huge production interruption at a large US facility," said Alex Munton, director of global gas and LNG at Rapidan Energy.
According to him, Freeport LNG ships four cargoes per week, and a three-week outage would remove at least 1 million tonnes of LNG from the market.