Natural gas trims gains as Freeport LNG likely to extend outage

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U.S. natural gas pared earlier gains Monday after liquefied natural gas exporter told buyers it likely will cancel shipments scheduled for November and December as work continues on repairs and regulatory approvals before a restart, Bloomberg reports.

Freeport LNG, which previously accounted for ~15% of U.S. liquefied natural gas shipments, has said repeatedly that it was on track to restart the plant in November following an explosion that shut it on June 8; an extended outage would reduce exports to customers in Europe and Asia as winter begins.

Front-month Nymex natural gas (NG1:COM) for December delivery settled +0.9% to $5.9330/MMBtu after surging as much as 9%.

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Freeport LNG has not yet provided regulators with a final repair plan, likely pushing any restart into early next year, according to Reuters.

The company's November target "is not credible, nor is a December restart," Rapidan Energy's Alex Munton reportedly said, predicting a resumption of gas processing in Q1 2023 "with longer delays possible."

Separately, European benchmark natural gas futures soared 16% Monday, rebounding from Friday's 14% drop, as temperatures are set to dip below average toward the end of the week after an extended period of unusually mild weather, according to forecaster Maxar Technologies, which should prompt people to start using heaters.

Last week, Freeport LNG said false information was circulating about the restart of the plant.