Cheniere knows the Chinese LNG market well. Last month, the company signed the first ever long-term supply contract to send American LNG to China. The China National Petroleum Corporation (CNPC) purchased 1.2 million tonnes of LNG per year for 25 years. CNPC needs natural gas because China is trying to reduce air pollution by switching from coal to natural gas in electricity generation. Both President Trump and China’s President Xi Jinping have shown support for the deal.
Japan is the largest importer of LNG in the world, and it has brought in 10 to 12 billion cubic feet per day (bcf/d) of LNG. South Korea has long been the second biggest importer, but China’s rapid growth in imports since 2015 led to China becoming the second biggest importer as of January 2018. China reached 5 million bcf/d on average in 2017, including 7.8 bcf/d in December. Many estimates say that China may soon overtake Japan as the top LNG importer in the world.
China’s massive demand in December 2017 actually caused China to import more than 100% of its “nameplate” import capacity. In other words, China brought in more LNG that it really should have been able to handle. China is also unique in that it has both significant pipeline import capacity and it produces its own gas. Japan and South Korea have no pipelines and no domestic production to speak of.
So far, all of America’s LNG export terminals are located on the Gulf Coast, but that still matters to our region. As more gas gets exported from the Gulf, a bigger portion of the country will rely on natural gas from Pennsylvania, Ohio, and West Virginia. If you want to help meet this growing demand, Cimmaron Land can help your company secure leases in the region. Just give us a call at (412) 212-7517.