China Is Rerouting U.S. Liquefied Natural Gas to Europe at a Big Profit

[beijingwalker]

China Is Rerouting U.S. Liquefied Natural Gas to Europe at a Big Profit​

Sluggish economy lets Chinese energy companies benefit from high global prices​

China’s ENN is expected to make a profit of between $110 million and $130 million on a single liquified natural gas shipment to Europe.PHOTO: THOMAS PETER/REUTERS
Oct. 3, 2022 5:30 am ET

SINGAPORE—The economic slowdown in China, a Trump-era trade deal and Europe’s desperate hunt for natural gas are creating a windfall for some Chinese energy companies. The unusual alignment is helping Europe stock up for the winter.

With demand down, Chinese companies that signed long-term contracts to buy U.S. liquefied natural gas are selling the excess and making hundreds of millions of dollars per cargo. Buyers include Europe, Japan and South Korea. Just 19 LNG vessels from the U.S. docked in China in the first eight months of the year, compared with 133 for the same period last year.

China is getting nearly 30% more gas from Russia so far this year, Chinese customs data show. The boost is due to a scheduled delivery increase from the Power of Siberia pipeline and from purchases of Russian LNG, typically at a steep discount, shipping data shows.

Chinese sales to Europe are too small to help the continent avoid potential shortages this winter. But they provide a possible preview of Moscow’s increased reliance on Beijing. Russia turned to China for economic and political support following the invasion of Ukraine, yet Chinese companies are undercutting its effort to sow divisions in Europe by stopping gas exports.

The U.S. and China negotiated a number of long-term LNG deals amid pressure on Beijing from the Trump administration’s trade deal to boost imports from the U.S. Unlike LNG contracts from other countries, U.S. LNG long-term contracts typically offer destination flexibility and their prices are indexed to the U.S. benchmark Henry Hub, which is currently a fraction of the spot market prices for LNG in Europe and Asia.

“This has been a win-win relationship for China and the U.S.,” said Wei Xiong, a Beijing-based senior analyst at the consulting firm Rystad Energy. The contracts, which run up to 25 years, gave U.S. suppliers the confidence to build more multibillion-dollar LNG terminals along the Gulf Coast, boosting the country’s capacity to export more gas.


China’s ENN Natural Gas Co. is expected to profit from this trade when it sends the LNG tanker Diamond Gas Victoria to pick up a cargo of gas from Cheniere Energy plant at Sabine Pass, La., on the Gulf Coast on Oct. 18, according to three industry sources.

Instead of dispatching the tanker to China’s east coast, the vessel is scheduled to deliver LNG to Europe, they said. ENN is estimated to make a profit of between $110 million and $130 million on this one cargo shipment, analysts said, basing their calculations on market pricing data.

The deals that Cheniere signed with ENN and Sinochem International Corp. for 0.9 million metric tons of LNG a year each came into effect in July. This year, all available cargo was resold, according to a person familiar with the deals. A LNG cargo usually ranges between 60,000 and 80,000 metric tons.

“We’ve resold U.S. cargo. It’s allowed and the prices are favorable,” said Wu Qiunan, chief economist at PetroChina International, the trading arm of state-owned China National Petroleum Corp.

In 2018, Cheniere and CNPC signed a deal for LNG that would gradually increase to 1.2 million metric tons a year within five years.

Nippon Yusen Kaisha, which owns the Diamond Gas Victoria, ENN and Sinochem didn’t respond to requests for comment. Cheniere said it was “pleased that we can be a reliable supplier of flexible LNG to customers at such a pivotal time.”

Since 2021, U.S. suppliers and Chinese buyers have announced 16 deals for a total of around 19 million metric tons of LNG a year that are gradually coming into effect over the next five years.


In August, China received three cargoes out of Sakhalin-2, an oil and gas project that includes LNG production in Russia’s Far East, according to shipping data from S&P Global. People in the market say they were bought at a steep discount from the spot market price by Chinese state-owned energy companies.

Sakhalin Energy didn’t respond to a request for comment.

Chinese imports of U.S. LNG fell 84% since the war in Ukraine began, as Chinese demand slumped due to Covid-19 lockdowns while European demand sent spot-market prices upward.

Estimating the profit Chinese companies are currently making is difficult. Deals are private, companies could be reselling both long-term cargoes as well as spot cargoes bought in advance and cargo can pass through the many hands during the trading process, even while the vessels are at sea.

Still, there is data that offers a glimpse into the scope. For 2022, China has 72 million tons of long-term contracted LNG but is predicted to only need 66 million tons, according to data firm ICIS.

This leaves China with a few million tons it can resell on the global spot market. Customs data shows that for the first eight months of the year, China exported around a quarter million metric tons of LNG worth $449 million to Europe and Asia, up from $7.3 million last year.

The data is likely incomplete because LNG prices are higher this year and the trading entities aren’t necessarily based in the countries where LNG is loaded or received.

Whether Chinese players can continue to profit from the current situation is unclear. Projections for China’s LNG demand this winter are muted amid uncertainty over whether Beijing will loosen its Covid policies and China’s own increased domestic gas production.

The current opportunities for Chinese companies may decline in the next few years with new LNG supply coming from Africa, Latin America and the Middle East, says Alex Siow, lead analyst for LNG at ICIS. “We should always be wary of the boom-and-bust cycle.”

China Is Rerouting U.S. Liquefied Natural Gas to Europe at a Big Profit

The sluggish economy and high demand in Europe let Chinese energy companies benefit from high global prices.

www.wsj.com

 

[beijingwalker]

Smart government makes money from dumb governments

 

[dbc]

six threads on the same topic. is it a slow news days?

 

[beijingwalker]

six threads on the same topic. is it a slow news days?

Today's news? 6 threads? reporting the same US gas?

 

[dbc]

Today's news? 6 threads? reporting the same US gas?

it's the same topic dear, you could easily have posted the news in any one of the five threads you already created since May 2022.

 

[beijingwalker]

it's the same topic dear, you could easily have posted the news in any one of the five threads you already created since May 2022.

5 months ago? I didn't find it, mod can merge it if what you said is true

 

[dbc]

5 months ago? I didn't find it, mod can merge it if what you said is true

you can see all the related threads you created by simply scrolling to the bottom of this page under "similar threads".

 

[LakeHawk180]

China Is Rerouting U.S. Liquefied Natural Gas to Europe at a Big Profit​

Sluggish economy lets Chinese energy companies benefit from high global prices​

China’s ENN is expected to make a profit of between $110 million and $130 million on a single liquified natural gas shipment to Europe.PHOTO: THOMAS PETER/REUTERS
Oct. 3, 2022 5:30 am ET

SINGAPORE—The economic slowdown in China, a Trump-era trade deal and Europe’s desperate hunt for natural gas are creating a windfall for some Chinese energy companies. The unusual alignment is helping Europe stock up for the winter.

With demand down, Chinese companies that signed long-term contracts to buy U.S. liquefied natural gas are selling the excess and making hundreds of millions of dollars per cargo. Buyers include Europe, Japan and South Korea. Just 19 LNG vessels from the U.S. docked in China in the first eight months of the year, compared with 133 for the same period last year.

China is getting nearly 30% more gas from Russia so far this year, Chinese customs data show. The boost is due to a scheduled delivery increase from the Power of Siberia pipeline and from purchases of Russian LNG, typically at a steep discount, shipping data shows.

Chinese sales to Europe are too small to help the continent avoid potential shortages this winter. But they provide a possible preview of Moscow’s increased reliance on Beijing. Russia turned to China for economic and political support following the invasion of Ukraine, yet Chinese companies are undercutting its effort to sow divisions in Europe by stopping gas exports.

The U.S. and China negotiated a number of long-term LNG deals amid pressure on Beijing from the Trump administration’s trade deal to boost imports from the U.S. Unlike LNG contracts from other countries, U.S. LNG long-term contracts typically offer destination flexibility and their prices are indexed to the U.S. benchmark Henry Hub, which is currently a fraction of the spot market prices for LNG in Europe and Asia.

“This has been a win-win relationship for China and the U.S.,” said Wei Xiong, a Beijing-based senior analyst at the consulting firm Rystad Energy. The contracts, which run up to 25 years, gave U.S. suppliers the confidence to build more multibillion-dollar LNG terminals along the Gulf Coast, boosting the country’s capacity to export more gas.


China’s ENN Natural Gas Co. is expected to profit from this trade when it sends the LNG tanker Diamond Gas Victoria to pick up a cargo of gas from Cheniere Energy plant at Sabine Pass, La., on the Gulf Coast on Oct. 18, according to three industry sources.

Instead of dispatching the tanker to China’s east coast, the vessel is scheduled to deliver LNG to Europe, they said. ENN is estimated to make a profit of between $110 million and $130 million on this one cargo shipment, analysts said, basing their calculations on market pricing data.

The deals that Cheniere signed with ENN and Sinochem International Corp. for 0.9 million metric tons of LNG a year each came into effect in July. This year, all available cargo was resold, according to a person familiar with the deals. A LNG cargo usually ranges between 60,000 and 80,000 metric tons.

“We’ve resold U.S. cargo. It’s allowed and the prices are favorable,” said Wu Qiunan, chief economist at PetroChina International, the trading arm of state-owned China National Petroleum Corp.

In 2018, Cheniere and CNPC signed a deal for LNG that would gradually increase to 1.2 million metric tons a year within five years.

Nippon Yusen Kaisha, which owns the Diamond Gas Victoria, ENN and Sinochem didn’t respond to requests for comment. Cheniere said it was “pleased that we can be a reliable supplier of flexible LNG to customers at such a pivotal time.”

Since 2021, U.S. suppliers and Chinese buyers have announced 16 deals for a total of around 19 million metric tons of LNG a year that are gradually coming into effect over the next five years.


In August, China received three cargoes out of Sakhalin-2, an oil and gas project that includes LNG production in Russia’s Far East, according to shipping data from S&P Global. People in the market say they were bought at a steep discount from the spot market price by Chinese state-owned energy companies.

Sakhalin Energy didn’t respond to a request for comment.

Chinese imports of U.S. LNG fell 84% since the war in Ukraine began, as Chinese demand slumped due to Covid-19 lockdowns while European demand sent spot-market prices upward.

Estimating the profit Chinese companies are currently making is difficult. Deals are private, companies could be reselling both long-term cargoes as well as spot cargoes bought in advance and cargo can pass through the many hands during the trading process, even while the vessels are at sea.

Still, there is data that offers a glimpse into the scope. For 2022, China has 72 million tons of long-term contracted LNG but is predicted to only need 66 million tons, according to data firm ICIS.

This leaves China with a few million tons it can resell on the global spot market. Customs data shows that for the first eight months of the year, China exported around a quarter million metric tons of LNG worth $449 million to Europe and Asia, up from $7.3 million last year.

The data is likely incomplete because LNG prices are higher this year and the trading entities aren’t necessarily based in the countries where LNG is loaded or received.

Whether Chinese players can continue to profit from the current situation is unclear. Projections for China’s LNG demand this winter are muted amid uncertainty over whether Beijing will loosen its Covid policies and China’s own increased domestic gas production.

The current opportunities for Chinese companies may decline in the next few years with new LNG supply coming from Africa, Latin America and the Middle East, says Alex Siow, lead analyst for LNG at ICIS. “We should always be wary of the boom-and-bust cycle.”

China Is Rerouting U.S. Liquefied Natural Gas to Europe at a Big Profit

The sluggish economy and high demand in Europe let Chinese energy companies benefit from high global prices.

www.wsj.com

How come the Chinese never bid on Pakistani LNG rfp? They seem like they could use some of it.

 

[Han Patriot]

A

six threads on the same topic. is it a slow news days?

This is what happens when the government is smart. Buy cheap Russian gas and sell expensive US gas to Europe. Lolol. If Russia was in Nato, China would have been check mated long ago.

 

[dbc]

A

This is what happens when the government is smart. Buy cheap Russian gas and sell expensive US gas to Europe. Lolol. If Russia was in Nato, China would have been check mated long ago.

yup the CPC has "lock down" smart....pun intended
Just make sure the "power of siberia" doesn't blow up when you need it most.
Also, Putin's days are numbered, the leadership that follows will have to make peace with Ukraine and NATO or live in a perpetual state of high military readiness at great cost until Russia unravels. There are no good choices for Russia anymore it's either become a vassal to China and hope China pays for Russia's military posture against the west and Ukraine in perpetuity or align with the west. Either way China loses, you either get a NATO friendly Russia or a permanent beggar draining your resources. Before you say China will trade energy for military financing, I don't think China is foolish enough to depend on Russia for its energy. Xi must be really angry with Putin for showing the world Russia is toothless bear.

 

[jhungary]

six threads on the same topic. is it a slow news days?

Meh he also post the $200 billion Germany oil cap the second time....

He don't ever watch what his or other people post, it's like his job to post and forgot.

 

[Menthol]

China is wrong for not sharing its gas with the country that needs it.

But once you did it, you will be backstabbed.


Basically being a human, everything is wrong if you make friends with the wrong person.

Politicians and media, say and publish anything they want.

They think they are smart by doing it.

But in reality, in everyday life, such behavior is condemned by everyone.

 

[khansaheeb]

China Is Rerouting U.S. Liquefied Natural Gas to Europe at a Big Profit​

Sluggish economy lets Chinese energy companies benefit from high global prices​

China’s ENN is expected to make a profit of between $110 million and $130 million on a single liquified natural gas shipment to Europe.PHOTO: THOMAS PETER/REUTERS
Oct. 3, 2022 5:30 am ET

SINGAPORE—The economic slowdown in China, a Trump-era trade deal and Europe’s desperate hunt for natural gas are creating a windfall for some Chinese energy companies. The unusual alignment is helping Europe stock up for the winter.

With demand down, Chinese companies that signed long-term contracts to buy U.S. liquefied natural gas are selling the excess and making hundreds of millions of dollars per cargo. Buyers include Europe, Japan and South Korea. Just 19 LNG vessels from the U.S. docked in China in the first eight months of the year, compared with 133 for the same period last year.

China is getting nearly 30% more gas from Russia so far this year, Chinese customs data show. The boost is due to a scheduled delivery increase from the Power of Siberia pipeline and from purchases of Russian LNG, typically at a steep discount, shipping data shows.

Chinese sales to Europe are too small to help the continent avoid potential shortages this winter. But they provide a possible preview of Moscow’s increased reliance on Beijing. Russia turned to China for economic and political support following the invasion of Ukraine, yet Chinese companies are undercutting its effort to sow divisions in Europe by stopping gas exports.

The U.S. and China negotiated a number of long-term LNG deals amid pressure on Beijing from the Trump administration’s trade deal to boost imports from the U.S. Unlike LNG contracts from other countries, U.S. LNG long-term contracts typically offer destination flexibility and their prices are indexed to the U.S. benchmark Henry Hub, which is currently a fraction of the spot market prices for LNG in Europe and Asia.

“This has been a win-win relationship for China and the U.S.,” said Wei Xiong, a Beijing-based senior analyst at the consulting firm Rystad Energy. The contracts, which run up to 25 years, gave U.S. suppliers the confidence to build more multibillion-dollar LNG terminals along the Gulf Coast, boosting the country’s capacity to export more gas.


China’s ENN Natural Gas Co. is expected to profit from this trade when it sends the LNG tanker Diamond Gas Victoria to pick up a cargo of gas from Cheniere Energy plant at Sabine Pass, La., on the Gulf Coast on Oct. 18, according to three industry sources.

Instead of dispatching the tanker to China’s east coast, the vessel is scheduled to deliver LNG to Europe, they said. ENN is estimated to make a profit of between $110 million and $130 million on this one cargo shipment, analysts said, basing their calculations on market pricing data.

The deals that Cheniere signed with ENN and Sinochem International Corp. for 0.9 million metric tons of LNG a year each came into effect in July. This year, all available cargo was resold, according to a person familiar with the deals. A LNG cargo usually ranges between 60,000 and 80,000 metric tons.

“We’ve resold U.S. cargo. It’s allowed and the prices are favorable,” said Wu Qiunan, chief economist at PetroChina International, the trading arm of state-owned China National Petroleum Corp.

In 2018, Cheniere and CNPC signed a deal for LNG that would gradually increase to 1.2 million metric tons a year within five years.

Nippon Yusen Kaisha, which owns the Diamond Gas Victoria, ENN and Sinochem didn’t respond to requests for comment. Cheniere said it was “pleased that we can be a reliable supplier of flexible LNG to customers at such a pivotal time.”

Since 2021, U.S. suppliers and Chinese buyers have announced 16 deals for a total of around 19 million metric tons of LNG a year that are gradually coming into effect over the next five years.


In August, China received three cargoes out of Sakhalin-2, an oil and gas project that includes LNG production in Russia’s Far East, according to shipping data from S&P Global. People in the market say they were bought at a steep discount from the spot market price by Chinese state-owned energy companies.

Sakhalin Energy didn’t respond to a request for comment.

Chinese imports of U.S. LNG fell 84% since the war in Ukraine began, as Chinese demand slumped due to Covid-19 lockdowns while European demand sent spot-market prices upward.

Estimating the profit Chinese companies are currently making is difficult. Deals are private, companies could be reselling both long-term cargoes as well as spot cargoes bought in advance and cargo can pass through the many hands during the trading process, even while the vessels are at sea.

Still, there is data that offers a glimpse into the scope. For 2022, China has 72 million tons of long-term contracted LNG but is predicted to only need 66 million tons, according to data firm ICIS.

This leaves China with a few million tons it can resell on the global spot market. Customs data shows that for the first eight months of the year, China exported around a quarter million metric tons of LNG worth $449 million to Europe and Asia, up from $7.3 million last year.

The data is likely incomplete because LNG prices are higher this year and the trading entities aren’t necessarily based in the countries where LNG is loaded or received.

Whether Chinese players can continue to profit from the current situation is unclear. Projections for China’s LNG demand this winter are muted amid uncertainty over whether Beijing will loosen its Covid policies and China’s own increased domestic gas production.

The current opportunities for Chinese companies may decline in the next few years with new LNG supply coming from Africa, Latin America and the Middle East, says Alex Siow, lead analyst for LNG at ICIS. “We should always be wary of the boom-and-bust cycle.”

China Is Rerouting U.S. Liquefied Natural Gas to Europe at a Big Profit

The sluggish economy and high demand in Europe let Chinese energy companies benefit from high global prices.

www.wsj.com

Seems like US and China have teamed up

 

[beijingwalker]

Seems like US and China have teamed up

Can't blame smart guys rush to exploit the dumb.

 

[hembo]

How come the Chinese never bid on Pakistani LNG rfp? They seem like they could use some of it.

No one's answering this??