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China Sells U.S. LNG to Europe at a Hefty Profit

China Sells U.S. LNG to Europe at a Hefty Profit

China resold several U.S. liquefied natural gas shipments to Europe, a rare move by the world’s top buyer that highlights how sky-high prices are rerouting trade flows.

Unipec, the trading arm of China’s state-owned Sinopec, sold at least three LNG cargoes for delivery through June to ports in Europe via a tender that closed late last week, according to traders with knowledge of the matter. The shipments will load from Venture Global LNG Inc.’s Calcasieu Pass export facility in Louisiana, where Sinopec has a deal to purchase LNG, they said, requesting anonymity to discuss private details.

China Sells U.S. LNG to Europe at a Hefty Profit

European natural gas rates surged to a record high last week on fears that the war in Ukraine will curb flows from top supplier Russia. The rally prompted Unipec’s traders to turn away from the lower-priced Chinese market, even as Beijing demand its importers secure more fuel amid concerns over wartime disruptions. 

European gas usually trades at a discount to LNG in North Asia, home to the top importers. But Europe’s plan to ditch Russian gas means that it will need to significantly boost LNG imports, with the continent’s prices primed to stay higher than Asian rates as it seeks to attract every last drop of fuel from the spot market.

  • Sakhalin Energy, which operates the Sakhalin II project in Russia’s Far East, plans to release a tender this week offering an LNG cargo for loading around April 25
  • South Korea’s LNG imports plunged 33% in February from a year earlier to 3.5 million tons as prices soared
  • Eni declares force majeure on Nigeria shipments of Brass crude after a blast on a pipeline in Bayelsa state, while Nigeria LNG is also affected

Buy tenders:

CompanyCargoesDestinationDeliveryBids DueValid Until
Gail1 DES cargo/monthDhamra, IndiaJan. 2023- Dec. 2032March 14 
GSPC1 DES cargoIndiaMarch 28-April 15March 16 

Sell tenders:

CompanyCargoesPortLoading/DeliveryBids DueValid Until
BHP1 FOB cargoNorth West Shelf, AustraliaMay 14-16 (Loading)March 16 
APLNG1 FOB cargoAustraliaApril 28-29 (loading)March 16 

Bids and offers on Platts JKM LNG Market on Close in $/mmbtu:

CompanyBid/OfferPriceDestinationDelivery
UniperBidMay JKM +4cJKTCMay 8-12
News & Research
  • LNG Demand Destruction Starts in China, Japan on High Cost: BNEF
  • U.S. LNG More Profitable to Europe; JKM-TTF Spread Shrinks: BNEF
  • LNG on Sea For at Least 20 Days Up 0.8%
  • Samsung C&T, Lilama Sign $940M Vietnam LNG Plants Contract
  • China Gas Sector Cut at Daiwa on Concerns Over Gas Sales Volume
  • EU’s Russian Gas Cull Spurs LNG and Clean Energy: BNEF Chart
  • Egypt’s Suez Canal Cancels Fee Discounts for LNG Carriers
  • Chinese LNG Buyers Cut Terminal Slots on Weak Gas Demand: BNEF

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