Page 4 - GLNG Week 07 2022

GLNG COMMENTARY GLNG

China seeks greater

global LNG trading role

China is reportedly working to establish itself as a major

player in global LNG trading, bolstered by liberalisation at

home and contracts abroad

POLICY CHINA is reportedly working to establish itself had signed two 20-year agreements with Sino-
as a major player in global LNG trading. The pec for a total of 4mn tonnes per year (tpy) of
WHAT: move comes around 20 years after the country LNG, and another 20-year deal with CNOOC
China is reportedly trying made a similar push into oil trading and coin- Gas & Power Group covering 2mn tpy. The US
to establish itself as a cides with a booming LNG market. company also agreed to supply a combined 5mn
major player in global Chinese firms are set to benefit from tpy to Sinopec and CNOOC for a shorter dura-
LNG trading. liberalisation at home and recently signed tion, while leading US LNG producer Cheniere
contracts with LNG suppliers overseas, Energy also announced smaller deals with Chi-
WHY: notably US producers of the super-chilled nese buyers in recent months.
The country has become fuel, according to Reuters. The news service Reuters cited one Beijing-based trade as say-
the world’s largest reported this week that Chinese firms Sin- ing the size of the contracts signed with US sup-
importer of LNG and is opec, Sinochem Group, ENN Natural Gas pliers was expected to leave China with plenty
keen to sell to expand and China Gas were among those building of LNG to trade on the global market after
into the growing spot up their trading teams from Beijing and Sin- domestic demand has been met. And efforts
market. gapore to London. to secure other sources of gas supply, such as
The development coincides with China edg- the recent deal between Russia’s Gazprom and
WHAT NEXT: ing out Japan to become the world’s largest buyer China National Petroleum Corp. (CNPC) for
CNOOC and Sinopec, of LNG. In 2021, Chinese imports of LNG rose 10bn cubic metres per year, also look set to help
among others, are by 18% to reach 79mn tonnes – a record high. China reduce its LNG needs, freeing up more
already trying to resell Meanwhile, the resumption of trade between cargoes for resale.
some of their LNG supply the US and China since the onset of the pan- “By having multiple pipelines from Russia,
but have run into some demic has come as a boost to both US producers Central Asia, along with their still growing
obstacles. and Chinese buyers, with several long-term sup- domestic production, expanding LNG port-
ply agreements announced last year. Notably, folio, and increasing storage capacity they
over the course of November and December, [Chinese firms] will certainly have the ability
the US’ Venture Global LNG confirmed that it to divert greater numbers of cargoes into the

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