With Winter Closing In, China Makes Huge Move to Secure Own Energy Supply - Report
As much of the world struggles with energy supplies and winter fast approaches, China has ordered its state-owned natural gas importers to stop selling liquefied natural gas to Europe and other parts of Asia so it will have enough fuel for winter, Bloomberg reported Monday.
With an economic slowdown lowering the demand for gas in China, state importers had been selling gas to European buyers and others, Business Insider reported.
But now, China’s National Development and Reform Commission has told Sinopec, Cnooc Ltd. and PetroChina Co. to stop shipping LNG supplies out of the country, Bloomberg reported, citing “people with knowledge of the matter who asked not to be named as the information isn’t public.”
Chinese suppliers’ decision to sell off large amounts of LNG has been a great help to Europe amid an energy crisis worsened by the Russian-Ukraine war.
For several months, China had been reselling natural gas that it had purchased from Russia at a discount, Insider reported.
With the West heavily sanctioning Russian fuel in response to the invasion of Ukraine, Russian fuel prices have dropped, and China has taken advantage of that. According to Insider, it got one batch of Russian LNG last month at a 50 percent discount.
The Chinese importers then resold the natural gas to Europe and other parts of Asia.
Nikkei Asia reported in August that Sinopec alone had resold about 3.15 million metric tons of LNG and that the total resold at that point was likely more than 4 million metric tons.
However, though Europe is scrambling for energy supplies, Chinese LNG resales could be becoming less attractive as shipping costs are high and European countries are finding other measures to fill their gas inventories, Bloomberg reported.
Germany, for example, is on track to hit its gas inventory target for the winter, according to Insider.
Since August, when gas prices in Europe skyrocketed in response to sanctions on Russia, prices have dropped by more than 50 percent, Insider reported.
That, coupled with China’s domestic need for LNG supplies, led to the export decision Bloomberg reported Monday.
It said the National Development and Reform Commission, PetroChina, Cnooc and Sinopec didn’t respond to requests for comment.
China tells its state-owned gas importers to stop reselling LNG to energy-starved buyers in Europe and Asia in order to ensure its own supply for the winter heating season https://t.co/Z7Vvg5zHkG
— Bloomberg (@business) October 17, 2022
Chinese President Xi Jinping spoke about the nation’s energy security in a speech Sunday.
“We will work actively and prudently toward the goals of reaching peak carbon emissions and carbon neutrality,” he said, according to Bloomberg.
“Based on China’s energy and resource endowments, we will advance initiatives to reach peak carbon emissions in a well-planned and phased way, in line with the principle of getting the new before discarding the old,” Xi said.
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