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China leaps right into LNG

Liquefied natural gas (LNG) has become a key commodity for the republic after iron ore

Two of China’s biggest state-owned LNG importers released tenders offering to sell dozens of cargoes. This time, they appear to be offering it to the Europeans to tide through winter. It began with Sinopec Group, and China National Offshore Oil Corporation (CNOOC) has also entered the ring.

A self-evident move
China’s 2 biggest state-owned LNG importers’ releasing tenders offering to sell dozens of cargoes. The move surprised traders and triggered a sell-off in spot natural gas from Asia to Europe. Another factor catalysing this was the impending end of the peak winter, making China in a position to be more generous to those who really need the gas. More LNG could be sent to energy-starved Europe, helping to ease pressure from its abnormally low inventories and curtailed supplies from top exporter Russia. The surprise would not really be a surprise if one can “see” there is another agenda involved.

Sinopec Group was the first to issue of a tender to sell 45 cargoes of LNG for delivery this year. Traders reportedly were invited to bid. Under the tender, Sinopec offered 2 – 5 five cargoes each month between February and October on a delivered ex-ship basis. Now China National Offshore Oil Corporation (CNOOC) is offering to sell one cargo per month between May and November. The tenders represent roughly 4 per cent of China’s total LNG imports last year in one of the biggest offerings from the nation. Company officials did not immediately respond to emailed requests for comment.

The deafening silence is too incriminating to ignore as the same strategy might have been deployed through collaborating with the second largest economy. Call it a snide public relations move, accessorised by environmental social and governance (ESG) to garner better multilateral relations, it remains to be seen if others can pinpoint the republic’s list of trade intents.

Marine Online News Team
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