European natural gas prices jump as US LNG export hub to stay closed while Nord Stream flows slashed

·1 min read
natural gas
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  • European natural gas surged 20% Tuesday while US prices declined 15%.

  • Freeport LNG said its plant in Texas wouldn't be fully operational until late 2022 following a fire last week.

  • Russia's Gazprom also said Tuesday it was limiting natural gas flows to Europe via the Nord Stream pipeline.

European natural gas prices surged 20% Tuesday on news that a key US export hub wouldn't be fully operational for months following a fire there last week.

The Freeport liquefied natural gas facility in Texas suffered a fire last Thursday that shut the plant down. Freeport said Tuesday that the facility would resume partial operations within 90 days but wouldn't be fully operational until late 2022.

Meanwhile, US natural gas prices plummeted 15% as the slowdown in exports at the Freeport plant means more supply will be stuck in Texas.

The slowdown could potentially worsen an already tightening supply stream, which has been exacerbated in the aftermath of Russia's invasion of Ukraine. Europe has been relying more on US supplies while cutting back on its dependence on Moscow.

The Freeport update comes as Russia's state-run Gazprom is reducing gas flows by 40% over a technical issue afflicting its Nord Stream pipeline.

Gazprom said Tuesday that it had the capacity to support flows of 100 million cubic meters of gas per day, down from 167 million. The Nord Stream is a key pipeline that supplies Europe with large swaths of energy.

Gazprom said part of the issue stemmed  in part from German-based Siemens failure to "return gas compressor units in due time following their repair." Gazprom added that only three of its GCU's were operational on Tuesday.

Read the original article on Business Insider