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Page added on December 26, 2018

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China Cracks Open Door for US Natural Gas Imports

Consumption

China last month imported two tankers of U.S. liquefied natural gas, nudging open a doorway that had been closed shut for a month at a time when America is rapidly expanding its ability to export the heating fuel.

The three operating U.S. terminals soaked up more than 5.1 billion cubic feet of natural gas from American shale basins on Sunday, the most ever. With two more U.S. terminals slated to open in the first quarter of 2019, China’s re-emergence as a customer as wintry weather descends offers a much-needed outlet for exports.

“This is important because priced U.S. natural gas with the tariff is still economical compared to other sources,” said Het Shah, founder of Analytix.AI, an energy market data analytics company in Calgary. “These tankers probably left the U.S. gulf coast in late October.”

While the imports offer short-term hope, Chinese companies are still unlikely to cement long-term deals for more LNG, hindering future projects, without Beijing and Washington resolving their differences over a festering trade war that’s spurred tit-for-tat tariffs in a wide variety of sectors.

The world’s second largest economy imported a record 5.99 million tons of LNG in November even as its reliance on American LNG fell. U.S. imports reached 138,892 tons, according to data from China’s General Administration of Customs. That equates to about 6.3 billion cubic feet of gas, or two tankers worth, Shah said.

In November a year earlier, China imported six tankers of American LNG at a time when China’s traditional suppliers in Central Asia were unable to keep up with demand as cold weather descended. The Asian giant was forced to turn increasingly to the U.S. for the fuel after requiring both businesses and homes to stop burning coal to cut pollution.

China has imported 60 cargoes from the U.S., or 12 percent of total shipments from the lower 48 states, according to U.S. Energy Department data going back to February 2016.

(Updates with China’s record LNG imports in the fifth paragraph.)

–With assistance from Jing Yang.

To contact the reporter on this story: Naureen S. Malik in New York at nmalik28@bloomberg.net

To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net, Reg Gale, Carlos Caminada

bloomberg



4 Comments on "China Cracks Open Door for US Natural Gas Imports"

  1. Pete Bauer on Wed, 26th Dec 2018 9:15 am 

    Very good news. China can import lot more natgas and they import in the liquefied form and also Methanol form.

    Methanol is already blended into petrol/gasoline and it takes 10% content in their petrol mix.

    By importing cleaner natgas, they can reduce imports of dirty oil from middle east and also their trade deficit with those countries.
    At the same time, the trade surplus with USA can be reduced and this will reduce trade friction.

    Win win for both countries.

  2. Pete Bauer on Wed, 26th Dec 2018 9:26 am 

    As expected Saudi Aramco is moving into retail fuel sales by setting up gas station network inside their country now.

    Soon, they will expand into overseas markets and this way, they could control upstream (production), midstream(refining) and downstream(retailing).

    They will be able to control the entire production supply chain and make more money and also thrash out the market manipulators.

    https://finance.yahoo.com/news/saudi-aramco-creates-fuel-retail-132616911.html

  3. Pete Bauer on Wed, 26th Dec 2018 12:13 pm 

    India is also joining the Methanol bandwagon for transport. Another big market for American Methanol.

    https://igpmethanol.com/2018/12/18/niti-bats-for-methanol-as-a-fuel-for-cooking-and-transport/

  4. dissident on Wed, 26th Dec 2018 5:44 pm 

    So the US will replace Russia’s 150 billion cubic meters of natural gas per year to the EU and now it will also supply vast amounts of LNG to China.

    What a freaking joke. The USA had 5 bcm/year of export capacity in 2017. When are they going to start mailing out the surgical hose and glass jars for Americans to do their part to contribute the US gas export capacity?

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