Natural gas prices fall to 25-month low as key Texas LNG facility looks to restart exports

• Natural gas prices declined to a 25-month low on Monday, falling as much as 5%.
• The fall came despite news that a key LNG export hub in Texas looks to restart operations.

Natural gas prices were lower on Monday amid forecasts for mild winter weather and a report that a Freeport LNG export hub in Texas asked federal regulators for permission to resume operations.

Prices dropped as much as 5% then pared losses to trade down 3.3% at $2.43 per million British thermal units, nearing the lowest level since December 2020.

So far this year, natural gas prices have shed more than 30% and nearly 80% from an all-time high hit in August 2022, after Russia cut off gas flows to Europe and sparked an energy crisis there.

The Freeport liquefied natural gas plant first went offline in June of last year due to a fire. That has prevented more domestic supplies from being available for export, weighing down on US prices.

Resuming full operations and exports would help bolster prices as more US supplies would likely be shipped overseas.

But the Freeport facility, the second-biggest US LNG export plant, isn't expected to fully resume operations for months, according to regulators and analysts cited by Reuters. And the Monday filing with the US Federal Energy Regulatory Commission only laid out a so-called Phase 1 for a plan to resume commercial activities.

Meanwhile, forecasts for mild winter weather continued to weigh on natural gas prices as demand for the heating fuel lags.

For now, natural gas is flowing to the Freeport plant even as exports have yet to resume. On Monday, the amount of the super-cooled fuel at the facility touched the highest level since the export hub shut down. Flows were nearing 500 million cubic feet per day, a sharp increase from the average 43 million bcfpd since January.

But the increase is still only a small portion of Freeport's full capability, which can turn 2.1 billion cubic feet per day of gas into LNG when operating at full capacity.