Cheniere bets on Chinese demand for US gas exports

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Asian demand Natural gas Set to drive growth in the LNG industry “in the coming decades,” as one of the largest US exporters of fuel predicts, despite the world’s reduced reliance on hydrocarbons It has been.

Cheniere Energy’s Chief Commercial Officer, Anatol Feigin, will expand $ 7 billion in Texas’ liquefied natural gas facility next year to meet the surge in demand for LNG cargo in China and Japan, which has pushed gas prices to record highs. He said he would approve it.

“Asia will be the growth driver for the LNG demand industry over the next few decades, and we believe China is the largest part of it,” Fagin said.

Cheniere’s investment in Texas Some new LNG projects In the United States, companies are in a hurry to bring more supplies and need approval.

A vote of confidence in the long-term demand for ultra-cooled fuels points to a rare area of ​​potential growth in the oil and gas industry, which is being pressured to run out of assets as the world moves to cleaner fuels.

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To reach net zero carbon emissions by 2050, the International Energy Agency predicts that natural gas demand will peak in the late 2020s and need to decline by more than 5% annually in the 2030s. In that scenario, no new gas fields are needed, and many of the LNG facilities currently under construction or planned, according to the IEA, are not needed.

Global LNG trade peaks in the “mid-2020s,” but demand will continue to grow in countries such as China, where gas replaces coal, until at least 2030, the agency said.

Coal remains China’s largest source of power, but the government has put it on domestic gas infrastructure as part of Beijing’s first phase of efforts to combat air pollution and reach net zero carbon emissions by 2060. I have made a large investment.

“It’s very important that China’s infrastructure efforts are not just about capital investment, but also from a gas policy and regulatory perspective,” Fagin said, “doubling” Cheniere’s business with China’s demand alone. He added that it could cause him to do so.

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Based in Houston, a pioneer of US liquefied gas exports, Cheniere signed the first long-term contract to supply US LNG to China in 2018. After that, Washington clashed with Beijing, and LNG transactions between the United States and China stagnated. Trade Spat As a result, Tit-for-Tat tariffs were levied on everything from gas to musical instruments.

This week, Cheniere signed a second long-term supply contract to China, a 13-year contract with a subsidiary of ENN Natural Gas in China. The deal came about when another US exporter, Venture Global LNG, announced that it had signed three long-term supply contracts with state-owned Sinopek. Double China’s imports Of American natural gas.

European buyers have historically signed similar deals, but given the “uncertainty” about the speed of migration from hydrocarbons, Fagin said they are likely no longer wanting such long-term contracts. He said. Nevertheless, he predicted that they would still need a “medium-term” supply.

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“In Europe, the replacement of more polluted fuels will create very strong demand for imported gas in the 2020s and 2030s. [and] We believe that there will be decades of symbiosis between natural gas and renewable energy, “he said.

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