Page 12 - AsianOil Week 14

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US LNG exports to China resume thanks to tax waivers
POLICY
SHIPMENTS of US LNG to China are resuming after Beijing has reportedly started granting tax waivers to certain importers of the super-chilled fuel, according to shipping and trade sources cited by Reuters.
The news service reported on April 7 that four tankers were currently on their way to China after loading cargoes in the US last month, according to data from Refinitiv and Kpler. The data show that these tankers are due to arrive in China between late April and early May.
All four of the tankers are thought to be head- ing to Tianjin, where China National Offshore Oil Corp. (CNOOC) and Sinopec operate LNG import terminals. One of the tankers loaded its cargo from Cameron LNG in Louisiana, two from Sabine Pass, also in Louisiana, and one from Corpus Christi LNG in Texas.
This marks the first time since April 2019 that cargoes of US LNG have been shipped to China. Beijing imposed a 10% tariff on imports of US LNG in September 2018 as the trade war between the two countries escalated. The tariff rate was raised to 25% in June 2019, and while some LNG trade had initially continued, fol- lowing the tariff increase Chinese companies stopped buying US cargoes of the fuel.
China announced in February 2020 that it would start granting exemptions to tariffs on certain US goods. This followed a prelimi- nary deal that was agreed between Beijing and
Washington. Under this Phase 1 deal, China was supposed to dramatically ramp up purchases of US energy over 2020-21, but the coronavirus (COVID-19) pandemic has slowed progress towards this target.
Details on the companies that have received exemptions on the tariffs so far have not emerged, but Reuters cited two China-based sources as saying the tariff has dropped to zero, though a separate value-added tax of 10% still applies.™
Sino-Kazakh venture to build pipe factory
PIPELINES & TRANSPORT
CHINA and Kazakhstan are set to begin build- ing an oil and gas pipe factory in Almaty in the second quarter, after the project was quietly shelved two years ago.
Asia Steel Pipe – a 50:50 joint venture between state-owned KazMunayGas and China National Petroleum Corp. (CNPC) – will con- struct a plant capable of producing 100,000 tonnes per year (tpy) of large-diameter steel pipe, the Kazakh Ministry of Industry and Infrastruc- ture Development said on April 8.
“The project will be launched in the second quarter of 2020 in the industrial zone of Alatau dis- trict of Almaty. The total area of the construction site is 18.3 hectares [183,000 square metres]. The
construction of a high-tech plant will make it pos- sible to ensure import substitution of pipe products imported into Kazakhstan by 70%,” the ministry was reported as saying.
The project is part of Beijing’s Belt and Road Ini- tiative (BRI) – which aims to develop a global net- work of trade routes – and is expected to cost more than 33bn tenge ($75.8mn) to build. The ministry said the project could be expanded to 150,000 tpy in the future.
The proposed factory was first announced in April 2018 and carried a price of tag of $100mn. At the time, the reports suggested the plant would make pipes of between 355mm and 1,420mm in diameter.
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w w w . N E W S B A S E . c o m Week 14 09•April•2020