Page 4 - AsianOil Week 34 2022

AsianOil COMMENTARY AsianOil

China sees long-term

LNG deal frenzy

Chinese importers are bullish on the long-term prospects for gas demand in
the country, unlike their counterparts in Europe.

COMMENTARY CHINESE gas importers have clinched a raft affordable. China only signed a handful of long-
of long-term LNG deals since last year, mostly term deals in 2020, but went on to sign 23 in 2021
WHAT: with durations of between 15 and 20 years. This and the trend has continued into this year.
Chinese LNG importers shows that despite a predicted record dip in Chi-
have signed a raft of na’s LNG purchases this year, there remains con- Deal frenzy
short-term deals recently, fidence in the long-term demand prospects for Among the deals, US firm Venture Global signed
mostly with US suppliers. the fuel in the country. And the fact that many two 20-year agreements to supply a combined
dent of these agreements have been reached with the 4mn tonnes per year of LNG to China’s Sinopc
US raises questions about how much gas the EU from its Plaquemines LNG terminal in Louisi-
WHY: can obtain, given it is counting on US exporters ana. Venture Global also entered into a 20-year
China is confident about to help it eliminate Russian pipeline gas imports deal with CNOOC Gas & Power in Decem-
the long-term outlook for in the years to come. ber last year for 2mn tpy from Plaquemines.
gas demand, and wants The latest government data shows that Chi- CNOOC also committed to taking 1.5mn tpy of
to safeguard its energy nese LNG imports dropped 15.4% year on year LNG from Venture Global’s Calcasieu Pass facil-
security over the coming to 4.74mn tonnes in July, and supplies were down ity, also in Louisiana.
years at an affordable 20.3% y/y in the first seven months of 2022. But Meanwhile, Cheniere Energy in November
price. this is seen as a short-term phenomenon relating last year penned a deal with China’s Sinochem
to coronavirus (COVID-19) lockdowns, and it for 900,000 tpy of LNG over 17.5 years, and
WHAT NEXT: should be noted that the slump follows a record the volume could be raised later to 1.8mn tpy
Europe's unwillingness jump in Chinese LNG imports in 2021. if both sides agree to it. Cheniere also agreed to
to enter into long-term China, like other Asian gas markets, had been sell 1.8mn tpy of LNG from its Corpus Christi
LNG deals may see it lose shifting towards short-term spot deals in the terminal between 2026 and 2050 to PetroChina.
out on supply to Asian years before the energy crisis started. But with Guangzhou Development Group in April this
buyers that are betting spot prices now soaring, buyers are now eager to year reached a 20-year deal for 2mn tpy of LNG
on a larger role for gas in enter into more long-term deals, to protect their from Mexico Pacific LNG markets – specifically
the future. energy security into the future at prices that are its upcoming West Coast North American LNG

P4 www. NEWSBASE .com Week 34 29•August•2022