US, China trade deal will boost Texas LNG shipments
A new deal struck between China and the U.S. links the world’s largest liquefied natural gas growth market to the fastest-growing LNG exporter, and may encourage a new round of expansion along the Gulf Coast.This deal should speed the approval of several LNG projects slated for the Texas coast from Brownsville to the Sabine Pass. It should also stabilize prices in the natural gas market where new wells in the Permian Basin have added to the supply.
The U.S. Commerce Department announced yesterday a 100-day action plan between the U.S. and China that allows Chinese companies to negotiate long-term contracts to source LNG from U.S. suppliers. Energy research firm Wood Mackenzie said the deal has the potential to alter global LNG trade.
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WoodMac expects Chinese LNG demand to reach 75 million metric tons per year — or about $26 billion at today’s prices — by 2030, triple the current amount of LNG imports. “The U.S. is keen for a slice of the pie,” said Massimo Di-Odoardo, WoodMac’s head of global gas and LNG research.