With China deal, Gulf Coast poised for new LNG boom

James Marshall
May 13, 2017

The U.S. Commerce Department had announced an agreement to open the Chinese market to a select U.S. exports, which includes natural gas.

The governments will release a joint diplomatic communiqué sometime this month aimed at rebalancing and increasing trade between the two countries, the people said.

According to the Department of Energy, it has received export applications totaling 54.26 billion cubic feet per day to nations with free trade agreements (FTAs) with the United States and applications to export 50.67 billion cubic feet per day to countries without free trade agreements. It will also focus on other areas of trade, including agriculture, but the exact details of the agreement are unclear.

A guarantee by China to review the applications of eight US biotechnology products and approve or deny them exclusively on the basis of safety.

President Donald Trump made the USA trade imbalance with China a hallmark of his campaign, threatening at times to place steep tariffs on Chinese goods and label China a currency manipulator. China now has a ban on imports of US beef. "We are heartened by the U.S".

While British Columbia was counting absentee ballots from this week's election to find out who will form the next government - which could mean more political risk for proposed multi-billion-dollar liquefied natural gas projects - the United States was announcing a big deal with China that paves the way for an acceleration of its LNG industry.

To date, the US Department of Energy has authorized 19.2 Bcf/d of natural gas to be exported to non-FTA countries. Imports, on the other hand, totaled US$478.9 billion.

Exporters hope to capitalize on vast gas reserves unlocked by hydraulic fracturing.

"In the longer term, the deal paves the way for a second wave of investment in U.S. LNG", Di-Odoardo said.

US gas exports made up almost 7 percent of China's LNG imports in March, according to Bloomberg News.

China is attempting to wean itself of coal burning as it pursues a five-year plan to reduce air pollution and is increasingly turning to gas, a cleaner power source. The country's state-controlled firms will now have the permission to enter into long-term purchasing contracts with US suppliers. China's total LNG demand a year ago was 26 million metric tons.

"We believe that Sino-U.S. economic cooperation is the trend of the times".

Despite its huge trade deficit with China, at US$309.6 billion a year ago, the USA exported goods worth US$115.8 billion, making the Asian economy its largest goods trading partner.

Other reports by Click Lancashire

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