As European LNG buyers are snapping up cargoes from the United States in a race to replace Russian pipeline deliveries, America has become a major supplier to Europe, and its sales to China have dwindled to just a few cargoes shipped so far this year.Meanwhile, Chinese imports of LNG from Russia jumped by 50%, according to Chinese customs data cited by The Wall Street Journal.
That’s a major shift in U.S. LNG shipments to China. The United States was the largest supplier of spot LNG volumes to China last year, the EIA said last month.
In April 2022 alone, five European countries—France, Spain, the UK, the Netherlands, and Poland—accounted for 54.1% of total U.S. LNG exports, data from the U.S. Energy Department showed last week.
The Russian invasion of Ukraine and Europe’s resolve to kick its Russian energy addiction are changing global energy flows, not only in oil but also in gas.
Yet, scarce LNG imports from the U.S. in China will not persist for years to come because Chinese state majors and other energy firms have been signing
long-term deals with American exporters in recent months. Some of those LNG deliveries will begin as soon as 2022 and 2023.
Banned, sanctioned, and shunned in the West, Russia is now looking East to sell its energy. Analysts warn, however, that Russia—having no other choice—could become too dependent on China, especially for its gas sales. Moreover, the pipeline and LNG volumes Russia is sending to China are just a fraction of Russian pipeline exports to Europe, even as
Russia has slashed gas supply to Europe in the past weeks.
The European gas market remains far bigger and far more lucrative, says Nikos Tsafos, the James R. Schlesinger Chair in Energy and Geopolitics at the Energy Security and Climate Change Program at the Center for Strategic and International Studies (CSIS).
“Russia could eventually build a sizable business geared toward Asian markets, but the shift will be neither immediate nor easy, and it will depend critically on foreign partners, including China,” Tsafos wrote in an analysis last month.
“To secure a contract with China, Russia had to offer a bargain deal: China pays far less for Russian gas than Europe does,” he added.
source of the news:oilprice.com
