Francis Tuschek
China has “completely” stopped imports of US liquefied natural gas (LNG) for over ten weeks, extending the trade war between Beijing and Washington into energy cooperation, the Financial Times reported on Friday, citing shipping data.
Amid escalating trade tensions, China has imposed tariffs on US hydrocarbons – up to 99% – effectively pricing them out of the Chinese market. The standoff with China comes amid a wider US campaign targeting a number of countries. While most tariffs were paused for 90 days, China was excluded and faces total tariffs of up to 145%. In retaliation, Beijing imposed 125% tariffs on US goods and curbed exports of key high-tech minerals.
Since February, when a 69,000-ton LNG tanker from Corpus Christi, Texas arrived in Fujian province, China hasn’t received any LNG, signaling a sharp breakdown in the energy trade, the outlet said, citing Chinese-based energy traders.
A second tanker was redirected to Bangladesh after it failed to arrive before China imposed a 15% tariff on US LNG on February 10. The tariff has since been increased to 49%, making US LNG too expensive for Chinese buyers for the foreseeable future.
“There will be long-term consequences,” the FT quoted Anne-Sophie Corbeau, a gas specialist at Columbia University’s Center on Global Energy Policy, as saying. “I do not think Chinese LNG importers will ever contract any new US LNG.”
Chinese firms such as PetroChina and Sinopec have signed 13 long-term LNG contracts with US terminals, some lasting until 2049, according to Kpler. The deals were crucial for launching major US LNG projects. Developers, however, are now reportedly seeking to renegotiate terms due to inflation and tariff-related costs.
Beijing has also reportedly slashed purchases of American crude by 90% amid the tariff war.
The standoff with the US could deepen China’s already booming energy ties with Russia, casting doubt on the massive expansion of multibillion-dollar LNG terminals in the US and Mexico, the outlet said.
Earlier this week, China’s ambassador to Russia said Beijing is set to ramp up its imports of Russian LNG.
“I know for sure that there are a lot of buyers. So many buyers are asking the embassy to help establish contacts with Russian suppliers, I think there will definitely be more [imports],” Zhang Hanhui told reporters. He added that the two countries discussed the proposed Power of Siberia-2 gas pipeline from Russia to China. The route, however, has not yet been finalized.
Russia has become China’s third-largest LNG supplier, after Australia and Qatar. Last year, China led as the top buyer of Russian LNG in Asia, importing 7 million tons.