China ban on LNG imports shows they have studied and understand US vulnerabilities

[oil&gas]

April 09, 2025

In a move that stunned traders, analysts and policymakers alike, China has just announced a complete halt on all liquefied natural gas imports from the United States. A decision made abruptly with no prior indication, no phased reduction and no explanation beyond a terse statement from Beijing.

One moment American LNG tankers were in route across the Pacific. The next they were stranded, contracts frozen and billions of dollars now hang in limbo. This isn’t just another trade dispute. This is a deliberate geopolitical strike, one that could reshape the global energy balance, upend critical supply chains and leave US exporters bleeding….

While Washington reels from China’s sudden LNG embargo, Beijing has already made its next move, a quiet but powerful pivot across the globe. In a shift that caught many Western observers off-guard. China has begun rerouting LNG cargoes originally meant for East Asia straight into Europe’s energy-hungry markets. The message is clear: If the US wants to weaponise trade, China will weaponise its energy strategy.

The Chinese had already stopped ordering LNG from USA several weeks ago. And last month, they concluded a new deal with Australian suppliers.

Ian Welsh noted:

What’s becoming clear about this trade war is that China has gamed it out. They thought ahead, having learned lessons during the first Trump administration: they were ready. They’ve massively reduced their vulnerabilities and carefully examined America’s weaknesses, and now they’re hitting them. Hard.

This realigns American allies in Europe and Australia more towards China, it hurts the US, and it highlights the benefits of doing business with China.

China ban on LNG imports shows they have studied and understand US vulnerabilities

John Menadue wrote yesterday: In a move that stunned traders, analysts and policymakers alike, China has just announced a complete halt on all liquefied natural gas imports from the United States. A decision made abruptly with no prior indication, no...

www.dailykos.com

 

[oil&gas]

Donald Trump will turn out to be a greater president for climate
change than Biden. American oil and gas producers are going to
be forced to cut back on drilling to reduce production thanks to
energy price crash and China not wanting U.S. LNG. The U.S. under
Trump will contribute significantly to global emission reduction.

 

[oil&gas]

China Cuts The Legs Out Underneath The US LNG Industry
IAN WELSH
APRIL 9, 2025

In a move that stunned traders, analysts and policymakers alike, China has just announced a complete halt on all liquefied natural gas imports from the United States. A decision made abruptly with no prior indication, no phased reduction and no explanation beyond a terse statement from Beijing…

…China was one of the fastest growing markets for American LNG, importing more than four million tons annually. Cutting that overnight is more than symbolic, it’s surgical.

Early reactions have been nothing short of panic. Energy markets were jolted, LNG prices in Europe and Asia swung wildly and US energy firms reported immediate financial hits…

…Overnight, the US was eliminated from one of the world’s most lucrative gas markets worth more than US$2.4 billion a year. Let that number sink in. More than 4.4 million tons of American LNG every single year now suddenly has nowhere to go.

Ports along the Gulf Coast are already feeling the shock. Massive LNG tankers are sitting idle with nowhere to dock, no buyers to receive them. Terminal operators are scrambling to reroute shipments, but the damage is done. Revenue streams are drying up. American energy firms are haemorrhaging cash: millions of dollars in losses each day…

…

China has begun rerouting LNG cargoes originally meant for East Asia straight into Europe’s energy-hungry markets. The message is clear: If the US wants to weaponise trade, China will weaponise its energy strategy.

Why Europe? Because it’s vulnerable and China knows it. Since the Russian invasion of Ukraine, the European Union has been scrambling to find a replacement for Russian gas. For the past two years, the US had been the emergency supplier, shipping LNG across the Atlantic to prevent blackouts and political chaos in capitals from Berlin to Warsaw. But that relationship, built out of necessity, was never guaranteed.

And China just exposed that fragility. By stepping in with competitive LG offers at lower prices, China is capitalising on a moment of weakness. European energy firms, already strained by inflation and political pressure, are welcoming any chance to secure stable and affordable supply.

One of the major stories of the Ukraine war is how the US took advantage of the pipeline sabotage and sanctions to sell Europe natural gas. Expensive natural gas. This increased the energy cost of heavy industry and led to a lot of European, especially German factories, shuttering and moving to the US.

Win/Win. For America.

China isn’t itself an LNG exporter, but it controls a lot of the market thru long term contracts. It has an excess of what it needs, and it just signed a new contract with Australia for long term supply:

In March 2025, Australia’s energy giant Woodside Energy inked a game-changing 15-year contract with China Resources Gas, one of Beijing’s top natural gas distributors.

Under the deal, Australia will begin supplying 600,000 tons of LNG per year, starting in 2027. While the volume might not seem earth-shattering on paper, the symbolism behind the agreement is monumental…

… Australian LNG is currently 20% cheaper than US shipments largely due to proximity and lower transportation costs. It takes roughly 10 fewer days for Australian cargo to reach Chinese ports, compared to those from the US.

Australia, of course, has been rather anti-China and a big US ally, BUT cold hard cash, err, trumps that.

What’s becoming clear about this trade war is that China has gamed it out. They thought ahead, having learned lessons during the first Trump administration: they were ready. They’ve massively reduced their vulnerabilities and carefully examined America’s weaknesses, and now they’re hitting them. Hard.

This realigns American allies in Europe and Australia more towards China, it hurts the US, and it highlights the benefits of doing business with China.

Xi, as we discussed in our last article, has been planning for this, not just since Trump, but since he took power. He’s locked and loaded and he’s firing his guns. The more Trump doubles down, the more America will be hurt, because China needs America less than America needs China. In many cases America firms have no choice but to buy from China, there is nowhere else to get what they need, while China either has alternatives or has already written off buying from the US, as is the case with chips. To China, America is a lost cause: it can’t be relied on either as a supplier or a buyer.

If America’s effectively a write-off, well, treat it like a write-off. And that’s what China is doing.

Trump and many Americans thought that China was the vulnerable one, that China was in a weaker position than them (they made the same mistake with Canada). It isn’t. Now Europe and Japan are holding weaker hands than the US in a trade war, but here’s China actually strengthening Europe.

It is to laugh. Trump’s fundamentally incompetent, a D- player and he’s going up against Xi, who’s arguably a great statesman, and so far, Xi is ripping him a new one.

This is what actual planning and actual competence looks like: see threats in the future and get ready for them. When someone declares you their enemy, as the US has repeatedly, take them seriously.

We haven’t seen that in any Western country in at least two generations.

China Cuts The Legs Out Underneath The US LNG Industry – Ian Welsh

www.ianwelsh.net

 

[oil&gas]

TC Energy CEO says Canada can become top LNG supplier to Asia
April 10, 2025

The chief executive of pipeline operator TC Energy says he believes Canada can be the No. 1 exporter of liquefied natural gas to Asia, but political leadership is crucial to making it happen.

“We have the supply, we have a transportation cost advantage and the demand is there for the taking,” François Poirier said in a speech Thursday to Canadian Club Toronto.

“Our leaders need to unite on this ambition and show the world that Canada is back in business.”

Liquefied natural gas, or LNG, is gas that has been chilled into a liquid state, enabling it to be transported overseas in specialized tankers. Gas produced in Western Canada could sell for a much higher price in Asia than if it were to remain landlocked, and advocates say securing new buyers would reduce Canada’s reliance on the United States.

The initial phase of Canada’s first LNG export terminal is set to start up mid-year in Kitimat, B.C. LNG Canada said last week that a ship carrying imported natural gas arrived at the facility for equipment testing.

TC Energy built the pipeline, Coastal GasLink, that ships natural gas across B.C. to Kitimat.

Poirier said for Canada to be a global LNG leader, it will take political will as well as “big and bold” thinking.

“Fifteen years ago, Canada was at the starting blocks with the U.S. in pursuing LNG exports. At one point, Canada had 18 proposed LNG projects off the West Coast of Canada,” he said.

“We had the opportunity then to be No. 1 and now we’re playing catch up. Canada today is commissioning its first LNG facility, while the U.S., well, they’ve become the largest exporter in the world.”

Canada currently sends virtually all of its natural gas exports to the United States. The trade relationship between the two countries has been rattled by U.S. President Donald Trump’s evolving tariffs and musings about annexing Canada.

Poirier is also calling for “hands-on political management” to ensure projects are built on time and on budget. He said whichever party wins the April 28 federal election should ask business leaders for a list of priority projects that government, industry and Indigenous leaders can work together to build with a sense of urgency.

He added that policy certainty over project approval timelines is paramount if Canada is to compete for investment — it can take a decade for projects to come to fruition in this country.

“We risk ceding market share to our competitors, but more importantly we are entrusting our energy future to others and we are losing the opportunity for economic sovereignty that should be standard for a resource-rich country like Canada.”

Michael Sambasivam, a senior analyst with Investors for Paris Compliance who has researched global LNG, said “outdated assumptions” underpin the common view that Asia is an enormous growth area for natural gas demand and that Canada is perfectly suited to fill it.

“The mandate of the Government of Canada should not be to push these projects forward at any cost, which seems to be … the patriotic push right now,” he said.

“LNG has been painted as a bit of a money printer.”

The net-zero shareholder advocacy group published a report in December that noted an overbuild of LNG globally, uncertain demand in emerging markets, high Canadian production costs and political risks.

“We’re late to the game a little bit. And that late-to-the-game aspect is also going to hurt our ability to sell gas because a lot of these projects are contracted out on a multi-year basis,” Sambasivam said.

“Canada is still stuck paying off capital costs on a lot of these brand new LNG projects when the height of LNG demand is likely already in the rear-view window.”

TC’s Poirier was one of 14 energy executives who wrote an open letter to the four main federal party leaders ahead of the election call. In it, they urged Ottawa to invoke unspecified emergency powers to speed key projects deemed in the national interest.

They called for a simplification of regulation and a commitment to firm six-month deadlines for project approvals. They also want an elimination of the federal government’s cap on emissions, the repeal of the federal carbon levy on large emitters and loan guarantees to help Indigenous co-investment opportunities.

In a question-and-answer session with CIBC CEO Victor Dodig following his speech, Poirier said he wants more detail from the two parties leading in the polls.

“Saying you want pipelines to get built is polling well right now, but the reality is we are going to need a sustained level of support to build this infrastructure for five or more years,” Poirier said.

The Conservatives have pledged to take all of the actions the energy CEOs pushed for in their letter and have promised to develop a corridor where projects like pipelines would be pre-approved.

The Liberals have said they would speed up approvals for such projects by establishing a single office for major federal project assessments that would render a decision after just one review.

TC Energy CEO says Canada can become top LNG supplier to Asia

The chief executive of pipeline operator TC Energy says he believes Canada can be the No. 1 exporter of liquefied natural gas to Asia, but political leadership is crucial to making it happen.

www.bnnbloomberg.ca