Page 8 - AsianOil Week 42 2021

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China seeks more US LNG

Chinese natural gas importers are once more ramping up their purchases from US suppliers
as the country battles an energy crunch in the run-up to the peak winter demand season

COMMENTARY US liquefied natural gas (LNG) supplier Venture well as local government-backed energy dis-
Global LNG has publically joined compatriot tributor Zhejiang Energy.
Cheniere Energy in having closed a long-term The newswire said the discussions were
WHAT: supply deal with Chinese buyers. mainly being held with leading US LNG pro-
Chinese buyers have It emerged this week that Venture Global ducer Cheniere, as well as Venture Global, which
signed term contracts had signed two 20-year offtake contracts with is preparing to bring its first liquefaction plant
with Venture Global LNG China’s state-run Sinopec on September 1 for – the 10mn tpy Calcasieu Pass project – online.
and Cheniere Energy. a combined 4mn tonnes per year (tpy) of sup- One of Reuters’ sources said Sinopec alone
ply. Venture Global disclosed the deal to the US was looking to buy up to 4mn tpy, as it is more
WHY: Department of Energy (DOE) on October 1, exposed to the spot market than its domestic
Chinese buyers are with the DOE then publishing that information rivals; this speculation has been borne out by the
increasingly turning to US on October 19. DOE’s recent announcement.
LNG supply amid a surge The contracts – one for 2.8mn tpy and the The news service also cited traders as saying
in global prices. other for 1.2mn tpy – will be fulfilled by Venture Sinopec was in final-stage talks with three or four
Global’s proposed 20mn tpy Plaquemines LNG companies to buy 1mn tpy over a 10-year period,
WHAT NEXT: facility in Louisiana. with some of these volumes potentially coming
Chinese demand for gas The news comes after Cheniere’s announce- from the US.
will continue to soar ment last week that it had closed a term supply The Reuters report came after Cheniere said
as the country strives deal with privately owned ENN Natural Gas last week that it had struck a 13-year deal to sup-
to slash emissions this as well as recent media reports that both Ven- ply LNG to China’s privately owned ENN Natu-
decade. ture Global and Cheniere were in talks with ral Gas. This was the first major US-China LNG
several Chinese Energy over new long-term deal since 2018 and illustrates how US LNG is
supply deals. becoming increasingly attractive to Chinese
buyers.
Trade talk Reuters cited traders as saying that a deal sim-
Citing several sources familiar with the mat- ilar to ENN’s, at $2.50 plus 115% of Henry Hub
ter, Reuters said last week that the “advanced” futures, would work out as roughly about $9-10
talks involved at least five Chinese companies, per mmBtu ($248.94-276.60 per 1,000 cubic
including state-owned Sinopec and China metres) on a delivered basis into Northeast Asia.
National Offshore Oil Corp. (CNOOC), as This would include an average shipping cost of

P8 www. NEWSBASE .com Week 42 21•October•2021