China seems committed to rescuing Europe in the face of gas dearth occasioned by the absence of Russian gas. Bloomberg reported yesterday that China’s state energy majors have stepped up the sales of liquefied natural gas to struggling European countries.
Citing an unnamed source from the gas market, the agency said several cargos of U.S. LNG originally destined for China have been re-sold to Europe since the start of the year.
China National Offshore Oil Corporation (CNOOC is offering an LNG cargo from Australia’s North West Shelf for delivery in November. Meanwhile, Chinese imports of Russian liquefied natural gas have been on a strong rise this year.
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Since the Russian invasion of Ukraine, China’s spending on energy imports from Russia has jumped to $35 billion, from $20 billion a year earlier, the agency reported last month.
According to the report, as a result of strong Russian imports of liquefied natural gas, China has a comfortable surplus supply it can resell to Europe, which is yearning for alternative gas delivery sources to secure winter needs.
In a recent report on the LNG resale topic, however, the FT noted that the situation is precarious for Europe. China is selling LNG it does not need right now because of subdued economic activity.
“Once activity picks up, however, demand will rebound and there will be no more surplus cargos to ship to Europe,” Bloomberg said
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Sluggish economic growth amid a zero-Covid policy by the central government has caused China’s LNG demand to fall by as much as 20% this year, after hitting a high last year that turned the country into the largest LNG buyer in the world.
Chinese companies have sold some 4 million tons of liquefied natural gas on the international market, which is equal to about 7% of Europe’s gas consumption for the first half of the year, according to the F.T