Major Chinese energy companies are in advanced talks with U.S. exporters to secure long-term liquefied natural gas (LNG) supplies, as soaring gas prices and domestic power shortages heighten concerns about the country's fuel security, several sources said according to Reuters.
At least five Chinese firms, including state major Sinopec Corp and China National Offshore Oil Company (CNOOC) and local government-backed energy distributors like Zhejiang Energy, are in discussions with U.S. exporters, mainly Cheniere Energy and Venture Global, the sources told.
The discussions could lead to deals worth tens of billions of dollars that would mark a surge in China's LNG imports from the United States in coming years. At the height of a Sino-U.S. trade war in 2019, gas trade briefly came to a standstill. LNG export facilities can take years to build, and there are several projects in North America in the works that are not expected to start exporting until the middle of the decade.
Talks with U.S. suppliers began early this year but speeded up in recent months amid one of the biggest power-generating, heating fuel crunch in decades. Natural gas prices in Asia have jumped more than fivefold this year, sparking fears of power shortages in the winter.
Another Beijing-based source said: "After experiencing the recent massive market volatility, some buyers were regretting that they didn't sign enough long-term supplies."