Negotiations are underway for China to import natural gas (LNG) from the United States as concerns about power shortages grow due to a surge in energy prices, Reuters reported on the 16th (local time).
Citing a number of sources, the news agency reported that at least five Chinese energy companies, including Sinopec and the China National Offshore Oil Corporation (CNOOC), are in talks with US natural gas companies such as Chenier Energy and Venture Global for imports.
The deal involves China’s significant increase in natural gas imports from the United States over the next few years, which could be worth tens of billions of dollars, Reuters said.
As the trade war between the United States and China culminated in 2019, natural gas trade between the two countries has been temporarily suspended.
Negotiations have been going on since the beginning of this year, according to Reuters, but have moved forward in recent years as concerns have grown over the biggest power and fuel shortage in decades.
In Asia, natural gas prices soared fivefold this year, raising concerns about electricity shortages ahead of winter.
“Negotiations peaked when natural gas prices touched $15 per MMBTU (caloric unit),” said a Chinese source, while another source said, “Experiencing rapid market volatility in recent years, buyers are optimistic that they will not be able to provide sufficient long-term supply. “I regret not signing the contract,” he said.
A new agreement on the natural gas deal will be announced in the coming months, sources expected.
Earlier on the 11th, China’s ENN Natural Gas Company announced a 13-year contract with Chenier. This is the first major natural gas supply between the US and China since 2018.
Sinopec declined to comment on the negotiations, and Chinese buyers such as CNOOC and Storage Energy did not immediately respond. U.S. exporters such as Venture Global and Shenier also declined to comment, Reuters reported.
(Photo = Yonhap News)