Page 8 - NorthAmOil Week 47 2021

NorthAmOil COMMENTARY NorthAmOil

LNG trade booms ahead of winter

The global LNG trade is booming ahead of the Northern Hemisphere winter, with Asia’s

leading buyers ramping up deliveries, in competition with Europe

GLOBAL THE global LNG trade is booming ahead of the The y/y increase is not surprising given that
Northern Hemisphere winter. The leading buy- a trade war had kicked off between the US and
WHAT: ers in the world – China, Japan and South Korea China under former US President Donald
Asian imports of LNG are – are ramping up imports this month, while in Trump. A deal aimed at reviving US-China
booming along with US the US, LNG exports have reached record highs. energy trade was struck in January 2020. Beijing
exports of the super- The boom in US LNG exports provided some then started awarding tariff waivers to importers
chilled fuel. relief to buyers in Europe, but they face compe- of US LNG in the spring as China reopened after
tition from Asia as they scramble to replenish being the first country to lock down in response
WHY: gas stockpiles ahead of the winter. Indeed, major to the coronavirus (COVID-19) pandemic,
Demand has surged buyers in Asia are reported to be receiving more allowing LNG trade between the two countries
as countries reopen cargoes than Europe. to resume.
following pandemic- According to the US Energy Information
related lockdowns while On the rise Administration (EIA), the US began exporting
anticipating additional According to commodity consultancy Kpler, LNG to China again in March 2020, after a year-
consumption over the China, Japan and South Korea are forecast to long pause, and trade between the two hit an
winter. receive a combined 17.77mn tonnes of LNG in annual high of 214.4bn cubic feet (6.1bn cubic
November, up from 15.41mn tonnes in Octo- metres) that year. Monthly US LNG exports to
WHAT NEXT: ber. This will be the highest level since 19.01mn China have since hit a new record high of 51.7
European imports of LNG tonnes of the fuel were imported across the three bcf (1.5 bcm) in August 2021, the latest month
have not been as high, countries in February. for which data are available.
but this could change The increase in shipments to the Asian coun- Chinese firms have also played a prominent
depending on how certain tries is also backed up by port and vessel-track- role in numerous LNG offtake deals with US
trends play out. ing data compiled by Refinitiv, which puts their producers of the fuel that have been announced
November imports at 16.62mn tonnes, up from in recent weeks. The most recent of these came
15.13mn tonnes in October. this week, when Cheniere Energy said it had
In China, imports of US LNG have more than struck a 20-year deal to supply LNG to Chi-
tripled year on year over the first three quarters na’s Foran Energy Group. Cheniere has also
of 2021 as the Asian country moves to reduce recently made deals with ENN Natural Gas
its greenhouse gas (GHG) emissions even as its and Sinochem, while Venture Global LNG has
economy recovers from the lockdowns at the announced deals with Sinopec. The deals are set
start of the coronavirus (COVID-19) pandemic. to keep US LNG volumes flowing to China over

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