U.S. natural gas futures are in freefall, plunging more than 10% on Thursday after the U.S. Pipeline and Hazardous Materials Safety Administration said it found unsafe conditions at the Freeport LNG export terminal in Texas and will not allow the plant to restart until the completion of an outside analysis.
Nymex natural gas (NG1:COM) for August delivery -12.2% at $5.705/MMBtu, bringing the front-month contract on track for a decline of at least 25% for the month of June.
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“Continued operation of Freeport’s LNG export facility without corrective measures may pose an integrity risk to public safety,” PHMSA said in its preliminary report on the largest U.S. gas export facility.
PHMSA said Freeport LNG must provide weekly updates on temperature and density of LNG stored in its three storage tanks, and must select an independent third party to perform evaluation.
The Freeport LNG terminal has been shut since June 8 due to an explosion that would result in an extended outage at the facility.