As the trade war between Beijing and Washington escalates, fewer vessels carrying U.S. liquefied natural gas (LNG) have been going to China.
China, which purchased about 15 percent of all U.S. LNG shipped in 2017, has taken delivery from just four vessels since June versus 17 during the first five months of the year.
Prior to the slowdown, China was on track to import 141.6 billion cubic feet (bcf) of U.S. LNG in 2018, up from 103.4 bcf in 2017 and 17.2 bcf in 2016. It imported no LNG from the United States in 2015.
At its current pace, however, China is now on track to purchase less than 100 bcf of U.S. LNG in 2018 – less than last year. The United States, meanwhile, is on track to export over 1,000 bcf of gas as LNG in 2018.
One billion cubic feet of gas is enough to fuel about 5 million U.S. homes for a day.
In addition to the trade war, LNG traders noted the slowdown was also partially due to seasonal weather factors. China uses more gas during winter months for heating than during the summer for cooling.
China, which became the world’s second biggest LNG importer in 2017, is buying more gas as the government tries to wean the country off dirty coal as part of its push to reduce pollution.
The United States is expected to become the world’s third biggest LNG exporter by capacity in 2019.
Source: Reuters
