Major Chinese energy companies are in advanced talks with U.S. exporters to secure long-term liquefied natural gas (LNG)supplies, as soaring gas prices and domestic power shortages heighten concerns about the country's fuel security, several sources said.
At least five Chinese firms, including state major Sinopec Corp and China National Offshore Oil Company (CNOOC) and local government-backed energy distributors like Zhejiang Energy, are in discussions with U.S. exporters, mainly Cheniere Energy (LNG.A) and Venture Global, the sources told Reuters.
The discussions could lead to deals worth tens of billions of dollars that would mark a surge in China's LNG imports from the United States. At the height of Sino-U.S. trade war in 2019, gas trade briefly came to a standstill.
Talks with U.S. suppliers began early this year but speeded up in recent months amid one of the biggest power-generating, heating fuel crunch in decades. Natural gas prices in Asia have jumped more than fivefold this year, sparking fears of power shortages in the winter.
"Companies faced a supply gap (for winter) and surging prices. Talks really picked up since August when spot prices touched $15/mmbtu", said a Beijing-based senior industry source briefed on the talks.
Another Beijing-based source said: "After experiencing the recent massive market volatility, some buyers were regretting that they didn't sign enough long-term supplies."