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U.S. / China Dispute Helping LNG Canada, Hindering Industry

Stockhouse Editorial
0 Comments| October 22, 2018


“Dead in the water.” 

That’s where many of these liquefied natural gas projects could end up, if this trade war between the United States and China continues, according to one producer.

LNG Canada issued the challenge to its competitors on Monday, where its chief executive Andy Calitz said at an industry event in Nagoya, Japan that a final investment decision made by Royal Dutch Shell (NYSE: RDS.A) was “irrespective” of Chinese tariffs on American LNG. He added that such a measure would make U.S. gas less competitive.

Despite the 10% surcharge in Chana, LNG exports out of the U.S. are still competitive. Natural gas remains relatively inexpensive due to booming shale output, yielding rates that work to exporter’s advantage.

Meanwhile, once LNG Canada’s facility is fully operational, it will be closer to Asian consumer hubs than many other U.S. facilities, skipping the Panama Canal through the Gulf of Mexico and shaving freight costs. This, as China’s natural gas consumption rose 14.8% last year from the previous year to 238.6 billion cubic metres and is expected to reach 320 billion by 2020.

*Featured image, export facility rendering, via LNG Canada.

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