Natural Gas/Shipping: "Trade War Could Be ‘Pivotal’ For U.S. LNG"

A twofer. First up, Oilprice:

Donald Trump’s trade war with China is starting to scare away oil and gas investments, as new trade barriers clouds the long-term outlook on exports.

Australia LNG announced that it would delay a final investment decision on its Magnolia LNG plant in Louisiana until next year, citing trouble securing enough buyers in China. “We remain confident in our ability to reach (final investment decision) on Magnolia whether or not China participates,” CEO Greg Vesey said in a tweet, before arguing that “multiple opportunities with customers in Europe and Asia exist, and our discussions with them are proceeding well.”

His company might still move forward, but will need to find buyers elsewhere because the U.S.-China trade war shows no signs of abating, at least as of now. The Trump administration has implemented two rounds of tariffs on China. The first round consisted of about $50 billion in tariffs on Chinese goods, which was followed by a much more dramatic 10 percent tariff on $200 billion in imports from China. That 10 percent tariff is set to jump to 25 percent at the end of the year.

A possible third and even more dramatic round is still in the cards, which would hit an additional $257 billion in Chinese goods. That would be even more significant because it would amount to just about the entirety of U.S. imports from China and would hit a broader set of consumer goods, and its effects would be felt across U.S. society as everyday items would likely see price increases.

However, as it relates to the oil and gas market, the effects of the trade war are already evident. China retaliated to U.S. tariffs a few months ago by slapping a tariff on U.S. LNG. Without a clear path towards resolution, LNG developers cannot move forward with investment in new export terminals.

China is at the center of all global growth forecasts for LNG. The pace of Chinese demand for LNG largely determines the pace of global LNG demand growth. Chinese demand will also heavily influence prices, and thus, project economics, for the next decade or so. Any hiccup in Chinese demand will reverberate in gas markets around the world. The previously anticipated glut in LNG, and the recent tightness, all comes down to faster-than-expected imports of LNG into China.

As a result, a tariff on U.S. LNG into China upends the economics of any LNG export terminal within the United States....MUCH MORE

And from Sputnik:

China's Decision to Axe US LNG, Oil Not as Easy as It Seems – China Central TV Editor

China has stopped buying US crude and liquefied natural gas (LNG) in response to Donald Trump's decision to impose a third round of tariffs on $200 billion worth of Chinese imports. Speaking to Sputnik, CCTV editor Tom McGregor and Director at Eurasia Future Adam Garrie shared their views on Beijing's move and its potential consequences.

The introduction of 10-percent duties on US LNG by China on September 24 have made the super-chilled American fuel uncompetitive for Chinese customers. Besides hitting interests of US LNG producers, China's move may affect Washington's plans to take over the Asian market in the long run.

Forbes contributor Jude Clemente insisted in his September op-ed that "the US must not lose China's liquefied natural gas market." He highlighted that Donald Trump's trade war with Beijing "is throwing a giant monkey wrench" into the US' fast growing LNG industry, threatening the construction of up to 20 LNG terminals around the US.

In addition, on October 3, Reuters reported that US crude oil shipments to China had completely stopped in recent weeks, citing China Merchants Energy Shipping Co (CMES).

Sputnik reached out to Tom McGregor, a Beijing-based political analyst and senior editor for China's national TV broadcaster CCTV, who shared his opinion on the other side of the coin.

"My personal opinion is that Beijing took a huge gamble and unless the US-China trade talks are resolved soon, has placed itself in serious harm," McGregor suggested. "Perhaps, Chinese officials had anticipated by shutting down oil and gas imports from the US that US President Donald J. Trump would start turning wobbly, but they sharply misjudged him."

The CCTV commentator underscored that "such actions on the part of Beijing have only proved Trump's point that the Chinese really want trade wars and hope to harm Americans and the nation's economy in the process."

"Such drastic action by Beijing will only embolden Trump to impose tougher measures against China, since Beijing appears unwilling to compromise for the time being," he warned....MUCH MORE

Interesting coming from Sputnik, in that although not as rah-rah as RT, it is still a mouthpiece for the Putin administration.
And Moscow really, really wants that Chinese market for the Yamal natural gas.
Those big buck ice-breaking LNG tankers aren't just for giving bloggers something to post on.