China Runs To U.S. In Search Of Stable Liquefied Natural Gas
Major Chinese energy companies are in advanced talks with US exporters to secure long-term liquefied natural gas (LNG) supplies, as soaring gas prices and domestic power shortages heighten concerns about the country's fuel security, several sources told Chen Aizhu, Jessica Jaganathan and Scott Desavino reported for Reuters.
Photo Insert: A tanker transporting LNG
At least five Chinese firms, including state major Sinopec Corp and China National Offshore Oil Co. (CNOOC) and local government-backed energy distributors like Zhejiang Energy, are in discussions with US exporters, mainly Cheniere Energy and Venture Global, the sources told Reuters.
The discussions could lead to deals worth tens of billions of dollars that would mark a surge in China's LNG imports from the US in coming years. At the height of a Sino-US trade war in 2019, gas trade briefly came to a standstill.
LNG export facilities can take years to build, and there are several projects in North America in the works that are not expected to start exporting until the middle of the decade.
Talks with US suppliers began early this year but speeded up in recent months amid one of the biggest power-generating, heating fuel crunch in decades. Natural gas prices in Asia have jumped more than fivefold this year, sparking fears of power shortages in the winter.
Sources expected fresh deals to be announced over the coming few months, after privately controlled ENN Natural Gas Co., headed by the ex-LNG chief of China's largest buyer, CNOOC, announced a 13-year deal with Cheniere on Monday.
It was the first major US-China LNG deal since 2018. The new purchases will also cement China's position as the world's top LNG buyer, taking over from Japan this year.