Page 4 - EurOil Week 47 2021

EurOil COMMENTARY EurOil

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

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