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U.S. Restarts LNG Exports To China After 1-Year Break

U.S. exports of liquefied natural gas (LNG) have resumed flowing to China for the first time since March 2019, after the Chinese authorities have granted tax waivers to several Chinese LNG importers, Reuters reported on Tuesday, quoting trade and shipping sources.  

According to Refinitiv’s ship-tracking data cited by Reuters, four tankers that have loaded LNG at U.S. LNG export facilities are planning to dock in China, where life has started to gradually return to normality, and industrial activity and demand have slowly started to recover.

A cargo from the Cameron LNG facility in Louisiana, two ships from

Sabine Pass, Louisiana, and one cargo out of Corpus Christi, Texas, are expected to reach China late in April or in early May, according to Refinitiv’s ship-tracking data.

Those LNG cargoes would be the first U.S. shipments of LNG to China in more than a year, after the trade war last year and the steep 25-percent Chinese tariff on imports of U.S. LNG had basically stalled energy trade between the world’s two biggest economies.

The U.S. and China signed a Phase One trade deal in the middle of January, with China promising to buy an additional US$52.4 billion worth of U.S. energy products in 2020 and 2021 on top of the 2017 levels. Despite the deal, China kept the 25-percent tariff on LNG imports from the U.S., and analysts largely concurred that given the tariff, unless political will in China dictates otherwise, the Chinese will not achieve the target to buy energy products.

But then came the coronavirus, sweeping through China first, and upending every analyst forecast for any deal or event this year.

Earlier this year, Rystad Energy estimated that China’s LNG imports from the U.S. would restart “only once the tariffs are lifted or if political support is offered by the Chinese government.”

China has begun granting tax waivers to exempt some of its LNG importers from the tariffs, three sources based in China with knowledge of the matter told Reuters.

By Tsvetana Paraskova for Oilprice.com

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  • Mamdouh Salameh on April 08 2020 said:
    This a bit of good news in a global economy which has been bereft of any good news since the coronavirus outbreak hit the world.

    It is particularly good news for US LNG exports, the global LNG industry and China’s economy which is bouncing back to good health and returning to normality. It is also good for the implementation of Phase One Trade deal between the United States and China.

    China’s economy may have suffered initially more than other major economies because it was the epicentre of the coronavirus outbreak. But because of the extraordinary measures that the government has implemented such as a strict lockdown of huge areas, it was able to control the outbreak and bounce back before all other countries of the world.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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