An explosion at a key Texas liquified natural gas plant sent European natural gas prices surging.
The top U.K. natural-gas contract, ICE UK Natural Gas Continuous Contract, jumped from £130 per megawatt hour to as high as £180, a 38 percent increase. It has since come down to £154.90.
The lead European contract, Dutch TTF Gas Futures, jumped 16 percent to €91.90 per megawatt hour. Its price has also moderated at a still high €86.20.
Prices of U.S. contract have been volatile, spiking sharply higher on Wednesday, crashing on Thursday morning, and then rising again.
The explosion as the Freeport LNG facility has raised fears that it could reduce supply available for export to Europe, which is struggling to wean itself from Russian energy.
Reuters reported the Freeport plant will remain shuttered for at least three weeks. The plant, which is near Quintana, Texas, boasts two gigantic LNG tanks that can each store 1 million barrels of LNG at 260 degrees below zero after being offloaded from tanker ships at their nearby dock. It is responsible for around one-fifth of LNG processed in the U.S.
Been in the Freeport area all day for an “incident” at LNG facility on Quintana Island. Freeport PD and witnesses say no doubt about it: it was an explosion. 💥 The fire/release has been contained and employees are accounted for. Investigation underway. pic.twitter.com/8wuGEGazb2
— Erica Simon (@EricaOnABC13) June 8, 2022
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