According to forecasts, next year China will become the world’s largest importer of natural gas
China will become the world’s largest importer of natural gas, with LNG imports forecast to rise 70pc by 2020 and ExxonMobil, the world’s largest publicly traded oil and gas company, is turning toward Beijing for business.
While most US companies try to avoid China due to the threat of trade war between the US and China, ExxonMobil has no doubts and focuses heavily on the demand for liquefied natural gas (LNG) in China, coupling multibillion-dollar production projects around the world with its first mainland storage and distribution outlet.
ExxonMobil strategy is moving on two tracks
The oil company’s strategy is divided into two parts: on the one hand, the expansion of supercooled gas production in places like Papua New Guinea and Mozambique and, on the other, the creation of demand for such supplies in China by opening the first Exxon import and storage hub.
According to an Exxon manager authorised to discuss the project, that combination “will guarantee us a steady outlet for lots of our LNG for decades”. The manager added that one of the company’s top policy goals this year is building its Chinese client roster.
LNG projects in Papua New Guinea and Mozambique will not incur the 10 per cent tariff China put on US gas
Saul Kavonic, oil and gas researcher for Credit Suisse in Sydney, Australia, said that: “LNG players are increasingly adopting an LNG portfolio model whereby supply projects are not directly linked to end customers, with over 50 per cent of contracts now coming from portfolio suppliers rather than specific projects,”
Due to Chinese government gasification programme and due to fast rising industrial demand, China’s natural gas demand is rising really fast, with imports soaring well over 10 per cent annually. Exxon has not publicly named its partner in the Chinese import terminal. State-run power company Guangdong Yuedian Group said on its website it will join the project.
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