• 3 minutes "Biden Is Running U.S. Energy Security Into The Ground" by Irina Slav
  • 6 minutes How Far Have We Really Gotten With Alternative Energy
  • 9 minutes "How to Calculate Your Individual ESG Score to ensure that your Digital ID 'benefits' and money are accessible"
  • 20 mins GREEN NEW DEAL = BLIZZARD OF LIES
  • 9 days 87,000 new IRS agents, higher taxes, and a massive green energy slush fund... "Here Are The Winners And Losers In The 'Inflation Reduction Act'"-ZeroHedge
  • 7 days Energy Armageddon
  • 23 hours "Natural Gas Price Fundamental Daily Forecast – Grinding Toward Summer Highs Despite Huge Short Interest" by James Hyerczyk & REUTERS on NatGas
  • 3 days "Forget Oil, The Real Crisis Is Diesel Inventories: The US Has Just 25 Days Left" by Zero Hedge - 5 Stars *****
  • 3 days "The Global Digital ID Prison" by James Corbett of CorbettReport.com
  • 22 hours Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 3 days "Europe’s Energy Crisis Has Ended Its Era Of Abundance" by Irina Slav
  • 3 days The Federal Reserve and Money...Aspects which are not widely known
  • 11 hours Is Europe heading for winter of discontent with extensive gas shortages?
  • 4 days Goldman Betting on Cryptocurrencies
  • 7 days Сryptocurrency predictions
  • 12 days Putin and Xi Bet on the Global South
Nigeria’s Oil Industry Can Flourish Despite Oil Theft

Nigeria’s Oil Industry Can Flourish Despite Oil Theft

While Nigeria’s oil industry is…

Scandanavia Is Leading The Green Energy Revolution

Scandanavia Is Leading The Green Energy Revolution

Sweden, Denmark, and Finland are…

Bearish Sentiment Is Building In Oil Markets Once Again

Bearish Sentiment Is Building In Oil Markets Once Again

Bearish sentiment is building in…

Rystad Energy

Rystad Energy

Rystad Energy is an independent oil and gas consulting services and business intelligence data firm offering global databases, strategy consulting and research products. Rystad Energy’s…

More Info

Premium Content

Energy Megaprojects In Jeopardy As Trade War Escalates

The escalation of the trade war between the US and China could jeopardize several LNG mega projects that are awaiting final approval, according to Rystad Energy.

China announced on Monday that it will raise the duty on imports of US liquefied natural gas (LNG) to 25% from the previous level of 10% in retaliation to the US increasing its tariffs on $200 billion worth of Chinese goods.

Rystad Energy forecasts that Chinese LNG demand will reach 95 million tonnes per annum (tpa) in 2025, up from 53 million tpa in 2018. This would make China the world’s largest LNG importer. The US, on the other hand, is the fastest growing LNG exporter thanks to strong Asian and Chinese demand. Rystad Energy expects that US export volumes will nearly quadruple over the coming years, reaching 84 million tpa by 2025 based on currently sanctioned projects.

However, the increased tariffs will create additional headwinds for US LNG projects that are currently awaiting final investment decisions (FIDs). Rystad Energy, has noted previously that if LNG prices continue to linger around their current low level for an extended period of time, some of the more expensive LNG projects could struggle to offer competitive terms to buyers – and this could result in FID deferrals.

“Most of these projects need to secure long-term contracts in order to get financing for their development. Rystad Energy expects China to be one of the biggest contributors in sponsoring new LNG projects over the coming years, and there will be a reluctance to signing new deals with US projects as long as this trade war persists,” said Sindre Knutsson, Senior Analyst at Rystad Energy’s Gas Markets team. “For example, Cheniere and Sinopec agreed late last year on a 20-year deal that would supply 2 million tpa of LNG to China starting in 2023. This deal could have been signed once the trade tensions were resolved, but due to the heightened tensions this has not happened.” Related: Trump’s New Plan To Spark A California Oil Boom

China’s decision to impose tariffs on US LNG will make LNG projects outside of the US more attractive. As illustrated in the figure below, so-called oil-indexed gas contracts are more common in countries such as Australia, Qatar, Mozambique and Papua New Guinea compared to the US, where indexing to the Henry Hub price is more prevalent.

“This means that non-US projects are more competitive in terms of breakeven price (delivered), and that China therefore could have greater bargaining power when negotiating new contracts,” Knutsson remarked. 

Commenting on the short-term outlook for the global gas market, Per Magnus Nysveen, Rystad Energy Head of Analysis, said: “US LNG export to China is already seriously affected by the 10% tariffs in effect from last year, and we expect it continue to be so as long as the tariff is imposed.”

By Rystad Energy

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • Bill Simpson on May 15 2019 said:
    The 'father of the nuclear submarine', Admiral Hyman Rickover, was right when he warned us to, 'Conserve oil (and gas) as much as possible'.
    Shortly after the global supply of oil available begins to decline, taking the economy and banking system down with it, people then alive will recognize just how right he was. Finite is a fact.
    Exporting oil or gas from a country is just plain stupid, unless you have no other way to eat.

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News