The US and China have reached a (temporary) truce in the trade war, raising hopes that U.S. LNG exporters can tap demand in the world’s second largest LNG importer. Indeed, four tankers carrying U.S. LNG are en route to China. We are skeptical that Chinese buyers will ink long-term contracts with US LNG exporters, however, given persistent political and economic uncertainties. Chinese buyers may instead seek supplies from U.S. LNG exporters via the spot market or short-term (12-60 month) contracts, which would do little to advance the 2nd wave of LNG projects awaiting a Final Investment Decision (FID).
An umbrella in a hurricane: the pause in US-China trade war and implications for U.S. LNG
April 17, 2020