[Epoch Times October 15, 2021](Epoch Times reporter Li Yan comprehensive report) Soaring natural gas prices and power shortages have exacerbated China’s energy crisis. Some sources told Reuters that major Chinese energy companies are in in-depth negotiations with US exporters to ensure a long-term supply of liquefied natural gas (LNG) in China.
Sources told Reuters that at least five Chinese companies, including China’s state-owned Sinopec and China National Offshore Oil Corporation (CNOOC), and Zhejiang Energy and other local government-backed energy distributors, are working with Cheniere Energy Inc. ) Negotiations with US exporters such as Venture Global.
These discussions may lead to tens of billions of dollars in transactions, which means that China’s imports of LNG from the United States have surged. At the height of the Sino-US trade war in 2019, natural gas trade between the two countries has stalled.
Negotiations with US suppliers began in early 2021, but in recent months, the Chinese government has set off power cuts in response to the biggest energy crisis in decades, and the speed of negotiations has accelerated.
A participant in Beijing said, “We expect to sign the contract before the end of the year.” He said that related businesses are mainly driven by the global energy crisis and price trends, and “U.S. supplies are now very attractive.” For example, compared with oil supplies from Qatar and Australia, American goods used to be expensive, but now they are cheaper.
In 2021, Asian natural gas prices have jumped by as much as five times. Industry insiders predict that prices will be higher during the winter when demand usually surges.
Liquefied gas can be transported by large tankers, and then reduced to gas and sent to the natural gas network.
China becomes the world’s largest LNG buyer
According to sources, it is difficult to estimate the total volume of deals being discussed, and Sinopec alone may be interested in 4 million tons of deals per year.
Sources predict that China’s largest LNG buyer Xinao Natural Gas Co. and Chanier Energy are expected to announce new transactions in the coming months. The two parties have reached a 13-year deal on Monday (October 11, local time).
This is the first large-scale LNG transaction between the United States and China since 2018. The new purchases will also allow China to succeed Japan in 2021 and become the world‘s largest LNG buyer.
Since the negotiations were conducted privately, the source declined to be named.
Sinopec declined to comment to Reuters; CNOOC and Zhejiang Energy did not immediately respond to Reuters’ request for comment.
Global Venture Capital LNG declined to comment to Reuters; Chanier Company did not immediately respond to Reuters’ request for comment.
U.S. natural gas exporters increase production capacity
Due to the surge in demand from major Asian economies, LNG export companies in North America have been increasing production capacity.
Chanel Energy, the largest US exporter, said at the end of September that it expects to announce “some other transactions” to support them in the third phase of Corpus expansion next year.
The global venture capital LNG company is building and developing more than 50 million tons per year (MTPA) LNG capacity in Louisiana, including the 10MTPA Calcasieu project. The project is expected to cost approximately US$4.5 billion and will begin production of liquefied natural gas in test mode at the end of 2021.
Editor in charge: Lin Yan#
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