JERA expects fire-hit Freeport LNG Texas shipments to fully resume by March

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By Yuka Obayashi

TOKYO (Reuters) -Japan's biggest buyer of liquefied natural gas (LNG), JERA, expects Freeport LNG's production at its fire-hit Texas plant to partially resume in mid-December and its shipments to be fully back by March, President Satoshi Onoda said on Tuesday.

U.S. LNG company Freeport LNG has said it was targeting a mid-December restart for its Texas export plant, which has been shut for six months after a fire. Freeport had said repeatedly that the plant was on track to return to service in November.

"Freeport facilities are expected to be partially restored by mid-December and return to full operation by March," Onoda told a news conference.

The LNG project is seen to reach a state where about 80% of its supply could be shipped in early January, a JERA spokesperson said.

JERA said in October it would book a 110 billion yen ($794 million) loss related to the Freeport LNG fire, mostly due to higher costs as it needed to buy alternative fuel from the soaring spot market.

"We don't have plans to revise our earnings forecast now with a delay in restart by a month," Onoda said, adding no impact is expected on its earnings from the disruption in the next financial year starting in April.

Japan's biggest power generator has no plan to amend its decarbonisation investments despite the hefty loss from the disruption.

Resource-poor Japan is facing a historic energy security risk following Russia's invasion of Ukraine.

"Tough environment to buy LNG will continue next year as Asia is following the trend in Europe where the countries are moving away from Russian gas," Onoda said.

JERA has no immediate plans to boost its long-term LNG contracts, but having a certain level of long-term contracts in its portfolio is important, Onoda said.

Asked whether JERA will renew its long-term LNG contract with Brunei, due to expire in 2023, Onoda declined to comment.

"We are still considering whether or not to renew the contract," he said, adding JERA is seeking the best portfolio.

JERA did not renew its long-term contracts on the Qatargas I LNG project which expired last year.

(Reporting by Yuka Obayashi; Editing by Tom Hogue and Muralikumar Anantharaman)


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