China ceases all purchases of LNG from US, reports FT
Beijing's retaliatory tariffs have rendered American gas financially unviable, the outlet has reported. According to the Financial Times on Friday, China has “completely” halted imports of US liquefied natural gas for over ten weeks, marking...
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Beijing's retaliatory tariffs have rendered American gas financially unviable, the outlet has reported.
According to the Financial Times on Friday, China has “completely” halted imports of US liquefied natural gas for over ten weeks, marking an intensification of the trade war between Beijing and Washington that now extends into the energy sector, as indicated by shipping data.
Amid rising trade tensions, China has implemented tariffs on US hydrocarbons that reach as high as 99%, effectively excluding them from the Chinese market. This standoff is part of a broader US campaign targeting various countries. While many tariffs were suspended for 90 days, China remains unaffected and faces total tariffs as high as 145%. In response, Beijing has enacted 125% tariffs on US goods and limited the export of critical high-tech minerals.
Since February, when a 69,000-ton LNG tanker from Corpus Christi, Texas, reached Fujian province, China has not imported any LNG, highlighting a significant collapse in the energy trade, according to Chinese-based energy traders cited by the outlet.
One tanker was rerouted to Bangladesh after failing to arrive before China placed a 15% tariff on US LNG on February 10. This tariff has since increased to 49%, making US LNG prohibitively expensive for Chinese buyers for the foreseeable future.
“There will be long-term consequences,” the FT quoted gas specialist Anne-Sophie Corbeau from Columbia University’s Center on Global Energy Policy as stating. “I do not think Chinese LNG importers will ever contract any new US LNG.”
Chinese companies such as PetroChina and Sinopec have entered into 13 long-term LNG contracts with US terminals, with some agreements extending until 2049, according to Kpler. These contracts were vital for the initiation of significant US LNG projects. However, developers are now reportedly looking to renegotiate terms due to inflation and tariff-related expenses.
As part of the ongoing tariff conflict, Beijing has reportedly reduced its purchases of American crude by 90%.
This standoff with the US could further deepen China's already flourishing energy relationship with Russia, raising uncertainties about the substantial expansion of multibillion-dollar LNG terminals in the US and Mexico, according to the outlet.
Earlier this week, China’s ambassador to Russia indicated that Beijing plans to increase its imports of Russian LNG. “I know for sure that there are a lot of buyers. So many buyers are asking the embassy to help establish contacts with Russian suppliers, I think there will definitely be more [imports],” Zhang Hanhui told reporters. He also mentioned discussions between the two countries regarding the proposed Power of Siberia-2 gas pipeline from Russia to China, although the route has yet to be finalized.
Currently, Russia ranks as China's third-largest LNG supplier, trailing behind Australia and Qatar. Last year, China emerged as the leading importer of Russian LNG in Asia, bringing in 7 million tons.
Max Fischer for TROIB News
According to the Financial Times on Friday, China has “completely” halted imports of US liquefied natural gas for over ten weeks, marking an intensification of the trade war between Beijing and Washington that now extends into the energy sector, as indicated by shipping data.
Amid rising trade tensions, China has implemented tariffs on US hydrocarbons that reach as high as 99%, effectively excluding them from the Chinese market. This standoff is part of a broader US campaign targeting various countries. While many tariffs were suspended for 90 days, China remains unaffected and faces total tariffs as high as 145%. In response, Beijing has enacted 125% tariffs on US goods and limited the export of critical high-tech minerals.
Since February, when a 69,000-ton LNG tanker from Corpus Christi, Texas, reached Fujian province, China has not imported any LNG, highlighting a significant collapse in the energy trade, according to Chinese-based energy traders cited by the outlet.
One tanker was rerouted to Bangladesh after failing to arrive before China placed a 15% tariff on US LNG on February 10. This tariff has since increased to 49%, making US LNG prohibitively expensive for Chinese buyers for the foreseeable future.
“There will be long-term consequences,” the FT quoted gas specialist Anne-Sophie Corbeau from Columbia University’s Center on Global Energy Policy as stating. “I do not think Chinese LNG importers will ever contract any new US LNG.”
Chinese companies such as PetroChina and Sinopec have entered into 13 long-term LNG contracts with US terminals, with some agreements extending until 2049, according to Kpler. These contracts were vital for the initiation of significant US LNG projects. However, developers are now reportedly looking to renegotiate terms due to inflation and tariff-related expenses.
As part of the ongoing tariff conflict, Beijing has reportedly reduced its purchases of American crude by 90%.
This standoff with the US could further deepen China's already flourishing energy relationship with Russia, raising uncertainties about the substantial expansion of multibillion-dollar LNG terminals in the US and Mexico, according to the outlet.
Earlier this week, China’s ambassador to Russia indicated that Beijing plans to increase its imports of Russian LNG. “I know for sure that there are a lot of buyers. So many buyers are asking the embassy to help establish contacts with Russian suppliers, I think there will definitely be more [imports],” Zhang Hanhui told reporters. He also mentioned discussions between the two countries regarding the proposed Power of Siberia-2 gas pipeline from Russia to China, although the route has yet to be finalized.
Currently, Russia ranks as China's third-largest LNG supplier, trailing behind Australia and Qatar. Last year, China emerged as the leading importer of Russian LNG in Asia, bringing in 7 million tons.
Max Fischer for TROIB News
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