Cheniere Energy takes ‘patient’ approach to U.S. trade war with China, LNG tariffs

[Elderberry]

Houston Chronicle by  Sergio Chapa June 3, 2019

Houston liquefied natural gas company Cheniere Energy is ready to wait out the U.S.-China trade war, but the 25 percent retaliatory tariffs imposed by China on U.S. LNG may already be taking a toll.

The Houston company sent 26 shipments of LNG to China in 2018, but only two through the first three months of this year, dropping China from Cheniere’s third biggest customer to the thirteenth. During a press conferecne Monday, Cheniere CEO Jack Fusco said the company viewed China as a “long-term investment” that will outlast the trade dispute.

“We don’t aspire to tariffs,” Fusco said. “We are a company that is more prone to support free trade. But having said that, we’re also very patient.”

LNG was targeted by the Chinese government following President Donald Trump’s decision to place 25 percent tariffs on some $200 billion of Chinese goods that come into the country each year. A mild winter had already weakened demand, but the tariffs have added pressure on the still young U.S. industry, putting it at disadvantage to competitors such as Australia and Qatar.

The trade war with China comes at a time when Cheniere has signed a series of deals to support expansion projects at its export terminals in Louisiana and Corpus Christi. Cheniere said Monday that it has made final investment decision to start construction on a sixth production unit known at Sabine Pass LNG. With an expected capacity of 4.9 million metric tons of LNG per year, the expansion project will be financed by a $1.5 billion credit agreement with MUFG Bank of Japan and 28 other banks.

More: https://www.houstonchronicle.com/business/article/Cheniere-Energy-takes-patient-approach-to-13926545.php

[IsailedawayfromFR]

China may not have much of a choice but to come back to buying LNG as it sees its domestic gas supply flopping

http://www.gopbriefingroom.com/index.php/topic,360926.0.html

[thackney]

China may not have much of a choice but to come back to buying LNG as it sees its domestic gas supply flopping

http://www.gopbriefingroom.com/index.php/topic,360926.0.html

They will likely buy gas from Australia or another while we then sell to the customer they used to supply.  A lot of LNG is tied in Long Term Contracts but enough of it is not to demonstrate it is a fungible commodity.