Page 6 - NorthAmOil Week 34 2022

NorthAmOil COMMENTARY NorthAmOil

China sees long-term

LNG deal frenzy

Chinese importers are bullish on the long-term

prospects for gas demand in the country, unlike

their counterparts in Europe

GLOBAL CHINESE gas importers have clinched a raft enter into more long-term deals, to protect their
of long-term LNG deals since last year, mostly energy security into the future at prices that are
WHAT: with durations of between 15 and 20 years. This affordable. China only signed a handful of long-
Chinese LNG importers shows that despite a predicted record dip in Chi- term deals in 2020, but went on to sign 23 in
have signed a raft of na’s LNG purchases this year, there remains con- 2021 and the trend has continued into this year.
short-term deals recently, fidence in the long-term demand prospects for
mostly with US suppliers. the fuel in the country. And the fact that many Deal frenzy
of these agreements have been reached with the Among the deals, US firm Venture Global signed
WHY: US raises questions about how much gas the EU two 20-year agreements to supply a combined
China is confident about can obtain, given it is counting on US exporters 4mn tonnes per year of LNG to China’s Sinopc
the long-term outlook for to help it eliminate Russian pipeline gas imports from its Plaquemines LNG terminal in Louisi-
gas demand, and wants in the years to come. ana. Venture Global also entered into a 20-year
to safeguard its energy The latest government data shows that Chi- deal with CNOOC Gas & Power in Decem-
security over the coming nese LNG imports dropped 15.4% year on year ber last year for 2mn tpy from Plaquemines.
years at an affordable to 4.74mn tonnes in July, and supplies were CNOOC also committed to taking 1.5mn tpy of
price. down 20.3% y/y in the first seven months of LNG from Venture Global’s Calcasieu Pass facil-
2022. But this is seen as a short-term phenome- ity, also in Louisiana.
WHAT NEXT: non relating to coronavirus (COVID-19) lock- Meanwhile, Cheniere Energy in November
Europe’s unwillingness downs, and it should be noted that the slump last year penned a deal with China’s Sinochem
to enter into long-term follows a record jump in Chinese LNG imports for 900,000 tpy of LNG over 17.5 years, and the
LNG deals may see it lose in 2021. volume could be raised later to 1.8mn tpy if
out on supply to Asian China, like other Asian gas markets, had been both sides agree to it. Cheniere also agreed to
buyers that are betting shifting towards short-term spot deals in the sell 1.8mn tpy of LNG from its Corpus Christi
on a larger role for gas in years before the energy crisis started. But with terminal between 2026 and 2050 to PetroChina.
the future. spot prices now soaring, buyers are now eager to Guangzhou Development Group in April this

Venture Global
is among the US
companies to have
signed several offtake
agreements with
Chinese buyers.

P6 www. NEWSBASE .com Week 34 25•August•2022