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China Is Rerouting U.S. Liquefied Natural Gas to Europe at a Big Profit
Posted on 10/3/22 at 8:43 am
Posted on 10/3/22 at 8:43 am
quote:
SINGAPORE—The economic slowdown in China, a Trump-era trade deal and Europe’s desperate hunt for natural gas are creating a windfall for some Chinese energy companies. The unusual alignment is helping Europe stock up for the winter.
With demand down, Chinese companies that signed long-term contracts to buy U.S. liquefied natural gas are selling the excess and making hundreds of millions of dollars per cargo. Buyers include Europe, Japan and South Korea. Just 19 LNG vessels from the U.S. docked in China in the first eight months of the year, compared with 133 for the same period last year.
China is getting nearly 30% more gas from Russia so far this year, Chinese customs data show. The boost is due to a scheduled delivery increase from the Power of Siberia pipeline and from purchases of Russian LNG, typically at a steep discount, shipping data shows.
LINK
Europe is still buying Russian natural gas but via China and the European's are now paying a premium.
10
Posted on 10/3/22 at 8:46 am to GumboPot
Capitalism 101
Posted on 10/3/22 at 8:46 am to GumboPot
I just posted on the OT about a minute after you as I didn't see this anywhere yet. 
Posted on 10/3/22 at 8:49 am to ragincajun03
quote:
I just posted on the OT about a minute after you as I didn't see this anywhere yet.
No big deal. Different audiences between boards anyway.
This post was edited on 10/3/22 at 8:52 am
Posted on 10/3/22 at 8:59 am to GumboPot
quote:Might be a dumb question but how do you simply "reroute" millions of CF of LNG? Is it by tanker ships? I mean, few companies have 100s of tanker ships sitting around idle. If many are used to ship this crap to Europe, that means whoever was getting it delivered in this ships prior will be sucking hind tit.
China Is Rerouting U.S. Liquefied Natural Gas to Europe at a Big Profit
Posted on 10/3/22 at 9:04 am to Diamondawg
quote:
Might be a dumb question but how do you simply "reroute" millions of CF of LNG? I
Hang a left at Key West instead of right.
Just joking.
Seriously…
What a miraculous coincidence this is after the pipeline sabotage.
This post was edited on 10/3/22 at 9:06 am
Posted on 10/3/22 at 9:06 am to Diamondawg
quote:
Might be a dumb question but how do you simply "reroute" millions of CF of LNG?
China hires LNG ships to bring LNG from U.S. to China. On the way China calls LNG ships on their way to China, "neverminded we just sold that LNG to Europe...reroute to said European LNG port". China profits.
Meanwhile Russia apparently has the capacity on the Serbian Pipeline to increases flows from Russian gas fields sufficiently enough to replace the volumes that were slated for China.
China is just taking advantage of a little arbitrage action. Happens all the time in the energy markets when you have the physical infrastructure to make it happen.
Posted on 10/3/22 at 9:07 am to Diamondawg
quote:
Might be a dumb question but how do you simply "reroute" millions of CF of LNG? Is it by tanker ships?
Yep.
It appears several of these Chinese-owned companies were able to lock-in on some larger-term contracts that were based off whatever the Henry Hub spot price would be, as part of a deal to have China import more US goods, since mostly what they do is dump a bunch of stuff and flood our domestic markets tariff-free (think seafood and other goods).
So now, it appears there's a combination of things leading to these companies being able to "reroute" LNG for a huge profit.
1- COVID lockdowns, and a desire to help Russia for now, causing China not to need so much LNG at their ports.
2- Able to purchase at HH spot price, but then deliver to Europe and sell at the spot prices there, which are MUCH higher. The tankers the Chinese companies have contracted just go from the U.S. ports straight to Europe instead of heading to Chinese ports.
That's my personal, stayed at a Holiday Inn last night, understanding of it. Maybe someone who is more on the LNG plant and shipping side can chime in with better insight.
This post was edited on 10/3/22 at 9:08 am
Posted on 10/3/22 at 9:09 am to loogaroo
quote:
What a miraculous coincidence this is after the pipeline sabotage.
This isn't something that just instantly occurred once the pipeline was damaged. Been happening for a bit now.
Posted on 10/3/22 at 9:11 am to ragincajun03
quote:
That's my personal, stayed at a Holiday Inn last night, understanding of it. Maybe someone who is more on the LNG plant and shipping side can chime in with better insight.
I see it the exact same way. It's not that complicated. The issue for China is replacing those volumes. They have apparently done that on the back side via the Serbian Pipeline which apparently had additional capacity.
Posted on 10/3/22 at 9:29 am to GumboPot
quote:OK. One more dumb question. Why is it liquid natural gas when a gas is not a liquid? What causes it to become a true "gas"; lack of pressure?
China hires LNG ships to bring LNG from U.S. to China.
Posted on 10/3/22 at 9:31 am to Diamondawg
Wanna bet Hunter is connected to the Chinese energy company
Posted on 10/3/22 at 9:32 am to GumboPot
They need the revenue to pay for their subversion of the U.S. govt. 
Posted on 10/3/22 at 9:36 am to Diamondawg
quote:
Why is it liquid natural gas when a gas is not a liquid? What causes it to become a true "gas"; lack of pressure?
Impurities are removed and then it is chilled/refrigerated until is condenses into a liquid.
Posted on 10/3/22 at 9:47 am to SingleMalt1973
quote:
Wanna bet Hunter is connected to the Chinese energy company
Maybe...though these contracts are made possible based on a trade deal made by the Trump Administration.
Posted on 10/3/22 at 9:47 am to Diamondawg
NG needs to be condensed into a liquid in order to make it economical to ship. So they liquify it > load it on to ships > deliver it to destination port > re-gasify it > pipe it to customers
Posted on 10/3/22 at 9:54 am to Diamondawg
quote:
Why is it liquid natural gas when a gas is not a liquid? What causes it to become a true "gas"; lack of pressure?
Liquefied petroleum gases have some very cool physical properties. The phase change aspects are part of what made propane the "original" refrigerant. It is easy to compress and creates a significant temperature differential between gas and liquid phases. New refrigerants in the future are going to contain a certain percentage of propane and I have a refrigerator from 1948 that still runs perfectly with just a few ounces of propane for the refrigerant.
Sorry to get off topic, I just get excited about propane.
This post was edited on 10/3/22 at 9:55 am
Posted on 10/3/22 at 9:59 am to GumboPot
TFW the Federal Government has no say in global banking
Posted on 10/3/22 at 10:06 am to GumboPot
Biden also sold China some of our emergency petroleum reserve oil that they in turn re-sold to Europe. Wonder if potato head got his 10% twice?
Posted on 10/3/22 at 10:06 am to GumboPot
If we really wanted to beat China, Russia, Iran and stop the war in Ukraine, while cementing our relationship with Europe, we would pump LNG and oil like crazy and sell to our neighbors.
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