WSJ: China profits from the resale of US LNG to Europe

Due to lower domestic demand for liquefied natural gas (LNG), China is selling surplus resources purchased from the United States to Europe. This was reported by The Wall Street Journal (WSJ) citing his sources, noting that the volume of supplies may indicate an increase in Russia’s dependence on China.

“Chinese companies that have signed long-term contracts to buy liquefied natural gas from the United States are selling surplus and earning hundreds of millions of dollars on each shipment,” the WSJ article says. It is clarified that among the main consumers of surplus resold LNG are European countries, Japan and South Korea. At the same time, since the beginning of 2022, seven times fewer American LNG ships have docked in China than in the same period in 2021 (133 vs. 19).

According to the newspaper, despite the overall increase in LNG sales from China to the EU countries, their volumes are insufficient to help Europe avoid an aggravation of the energy crisis this winter. “Russia turned to China for economic and political support after the invasion of Ukraine, but Chinese companies are undermining it (Russia.— “b”) attempts to sow discord in Europe by stopping gas exports,” the publication’s analysts suggest.

LNG exports from Russia to China have grown by 30% this year, according to data on the delivery of the resource, which the WSJ has reviewed. However, Russia supplies gas through the Power of Siberia at a big discount, while the Chinese side, on the contrary, resells the surplus “at favorable prices” and characterizes energy cooperation as “mutually beneficial.” Representatives of the Beijing companies Rystad Energy and PetroChina International agreed with this.

Formerly Yeni Safak newspaper notedthat China, similarly, resells Russian gas to Europe at a high margin, the direct supply of which to the EU is subject to a number of restrictions. Gazprom clarified that the volume of gas pumped from Russia to China in the first half of 2022 increased by 63%, exceeding domestic demand in China.

About Chinese energy policy – in the material “Kommersant FM” “China is draining gas”.

Andrey Sapozhnikov