Thread: Trump strikes deal to export more natural gas to China

Trump strikes deal to export more natural gas to China

by John Siciliano May 12, 2017, 12:23 PM

Demand for liquefied natural gas is expected to triple in China by 2030, providing a chance for U.S. companies to grab a slice of the huge market. (AP Photo/Alex Brandon)
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President Trump struck a deal with China last month to begin importing more natural gas from the United States, according to a joint statement issued late last night by the Commerce Department and the Asian power.

"The United States welcomes China, as well as any of our trading partners, to receive imports of [liquefied natural gas] from the United States," according to the agreement, which is being called the "100 day plan."

The plan said the U.S. "treats China no less favorably" than any of its other partners in authorizing natural gas shipments from the U.S. to Chinese ports. "Companies from China may proceed at any time to negotiate all types of contractual arrangement with U.S. LNG exporters, including long-term contracts, subject to the commercial considerations of the parties," it said.

The plan noted that as of April 25, the Department of Energy had authorized 19.2 billion cubic feet per day of natural gas exports to non-free trade agreement countries. The natural gas industry wants to create new markets in the wake of the nation's shale gas and oil boom as a result of fracking. The increased production has made the U.S. a global oil and gas leader.

Analysts came out Friday praising the deal as merging the largest energy consumer, China, with largest new energy supplier, the United States. It also helps Trump address trade imbalances with China to create a more equitable arrangement for both countries.

"The wider agreement represents a win for both sides," said Massimo Di-Odoardo, head of natural gas research with global consulting firm Wood Mackenzie. "It allows President Trump to deliver on his pledge of redressing global trade imbalances and China to show its commitment to becoming an equal trade partner."

He said until recently Chinese buyers have not bought long-term natural gas supplies directly from the United States. The new 100-day plan "ensures U.S. LNG entering the Chinese market will be politically palatable."

Di-Odoardo added that the agreement "connects the U.S., the fastest growing LNG supplier, with China, the largest LNG growth market." Demand for liquefied natural gas is expected to triple in China by 2030, providing the U.S. an opportunity to grab a slice of an estimated $26 billion-per-year market, Di-Odoardo.

The 100-day plan was outlined during Trump's meeting at Mar-a-Lago in April with Chinese President Xi Jinping. Although Trump has been bullish on U.S. coal production, no other energy resource was mentioned under the plan except natural gas.

In recent weeks, White House officials have been more vocal about natural gas exports as a key focus of the administration and are supporting the construction of more natural gas export terminals with the Energy Department issuing critical export licenses. A budget agreement in 2015 also opened the U.S. to export crude oil to overseas markets, but the administration has been silent on oil exports.

China increased its imports of U.S. coal supplies earlier this year after a cyclone disrupted supplies from Australia, its largest supplier.

China also denied coal from North Korea over its missile tests, which created new inroads for U.S. coal imports.

http://www.washingtonexaminer.com/tr...rticle/2622933

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