China is rushing to sign new long-term deals to import more and more liquefied natural gas (LNG), giving it more control over the critical energy source at a time when global demand for gas is rising.
One of the more notable developments is how China Gas Holdings, one of China’s largest private gas distributors, was able to carve out two 20-year LNG supply contracts with Venture Global, an American natural gas exporter. This adds to the whole host of deals signed between Chinese and American companies for American energy exports since 2021.
According to the agreement, China Gas Holdings, through its wholly-owned subsidiary China Gas Hongda Energy Trading Co., will buy two million tons of LNG per year from Venture Global.
The LNG will come from two of Venture Global’s natural gas projects in Louisiana – Plaquemines LNG and CP2 LNG. Each project is expected to provide about one million tons of LNG per year to China Gas Holdings.
In June last year, China Gas Holdings signed another deal with Energy Transfer, a Dallas-based natural gas company, to receive 0.7 million tons of LNG a year on a free-on-board basis for 25 years, with deliveries slated to begin by 2026.
And in 2021, Venture Global signed several more large deals with Chinese firms to export natural gas to the communist nation. This includes a 20-year deal with state-controlled oil and gas company Sinopec to supply four million tons of LNG a year and provide 3.8 million tons of LNG a year to Unipec, a subsidiary of Sinopec.
In 2021, China signed more contracts for natural gas export projects in the United States than any other nation. The country is also locked in deals with other natural gas exporters, including Brunei, Malaysia, Oman and Qatar, the latter of which signed one of the largest LNG deals ever with Sinopec.
China to dominate natural gas market for the foreseeable future
All of these new contracts mean that firms based in China now account for roughly 15 percent of all contracts that will begin delivering LNG up through 2027. This percentage will likely continue increasing as Chinese companies seek to lock in more long-term agreements, which will effectively give Chinese traders even more control over the precious resource for decades.
With a large-enough supply of LNG, China could be poised to become a big reseller of LNG to the highest bidders in Europe and Asia – or to withhold gas sales from global and regional rivals.
Eric Worrall, writing for Watts Up With That?, noted that China’s ambitious plan to shore up more of the world’s LNG comes as Western nations, including the United States, are crippling their own energy security by refusing to invest more on fossil fuels in pursuit of greener energies. (Related: Communist China now controls America’s energy grid, thanks to Biden.)
“The obvious counter-strategy to China making themselves the natural gas brokers of the world, and potentially making a fat profit from everyone’s gas bills by pushing up the price, is to break China’s monopoly by flooding Western markets with increased domestic gas production,” wrote Worrall. “But my suggested counter-strategy would require a rational Western political response to energy shortages.”
Learn more about the world’s energy situation at NewEnergyReport.com.
Watch this Fox Business clip featuring Montana Republican Sen. Eric Schmitt discussing China’s plans for world domination.
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