Protracted Freeport LNG Outage Sends Natural Gas Futures Freefalling

Natural gas futures plummeted Tuesday on news of a major long-term hit to U.S. export capacity.

At A Glance:

• Production falls to 97 Bcf/d
• Forecasts for mixed demand
• NGI models draw of 41 Bcf

After an explosion and fire at its liquefied natural gas (LNG) facility in Texas, Freeport LNG said Tuesday repair work would take several months. It is now targeting late 2022 for a return to full service.

The announcement dashed hopes for a mid-summer reboot, shook the global market and sent U.S. natural gas prices reeling. The July Nymex gas futures contract dropped $1.420 day/day and settled at $7.189/MMBtu. August fell $1.439 to $7.180.

NGI’s Spot Gas National Avg. followed suit, declining $1.370 to $7.265 despite strong early-week cooling demand.

Futures were up early in...