China Halts U.S. LNG Imports Amid Ongoing Trade Tensions
China has halted imports of U.S. LNG for 40 days, the longest gap in two years, due to ongoing trade tensions and tariffs. Chinese importers are reselling U.S. gas to Europe and seeking alternatives, while domestic gas production is on the rise. In a notable deal, China Resources Gas International signed a 15-year contract with Australia’s Woodside Energy, marking improved ties. The future of U.S. LNG contracts remains uncertain amid these changes.
As of March 19, 2025, Bloomberg News reports that China has suspended imports of liquefied natural gas (LNG) from the United States for 40 days, which represents the longest interruption in nearly two years. The halt in shipments arises as traders reroute their exports to other regions to circumvent Beijing’s tariffs on the super-chilled fuel. The records indicate that this is the longest dry spell since June 2023, while no U.S. LNG is currently headed to China, according to ship-tracking data from Bloomberg.
The ongoing trade tensions, which began with the Trump administration, continue to affect the trade dynamic between the world’s foremost LNG exporter and importer. Following the U.S. imposition of tariffs on Chinese goods, Beijing retaliated in February by imposing a 15% tariff specifically on U.S. LNG shipments. This has compelled Chinese buyers, who have long-term contracts with U.S. projects, to resell their LNG shipments to the European market.
In light of the tariffs, Chinese companies are exhibiting reluctance to engage in new contracts with U.S. suppliers, opting instead to explore alternatives from regions such as the Asia-Pacific and the Middle East. Notably, China Resources Gas International has secured a significant 15-year LNG purchase agreement from Australia’s Woodside Energy Group Ltd., commencing in 2027. This marks the first agreement of its kind between Chinese and Australian companies in several years, suggesting a warming of trade relations post-strains between Beijing and Canberra.
China is simultaneously increasing its domestic gas production in a strategic move to lessen import dependencies. Data indicates a year-on-year increase of 3.7% in gas output during the first two months of 2025. Additionally, the nation is leveraging alternative energy sources, including coal, renewables, and Russian piped gas, which are contributing to diminished demand for imported LNG.
Historically, the first Trump administration’s trade war had significantly curtailed U.S. LNG exports to China. Nevertheless, there was a rise in Chinese imports of American natural gas since 2020, averaging over 400,000 tons each month. In January, U.S. Secretary of State Marco Rubio suggested that LNG could serve as leverage in future trade discussions. However, it appears that China is not currently considering LNG in its negotiations, a situation that may adversely affect U.S. developers in securing new contracts and advancing new LNG projects.
The cessation of U.S. LNG imports by China for over a month reflects deepening trade tensions, accelerated by tariffs imposed due to previous trade disputes. As Chinese buyers resell their LNG to Europe and seek alternative suppliers, it illustrates a shifting landscape of energy trade. Additionally, China’s efforts to boost domestic gas production and diversify its energy sources further indicate a strategic move away from reliance on American LNG. The evolving dynamics demonstrate the impact of geopolitical relations on global energy markets.
Original Source: www.compressortech2.com
Post Comment