China's Sinopec Seeks Long-Term LNG as Prices Remain Low
SINGAPORE (Reuters) — China’s Sinopec is seeking liquefied natural gas (LNG) for delivery over a 10-year period to take advantage of the current low prices as gas demand has fallen because of the coronavirus pandemic.
Sinopec, officially named China Petroleum & Chemical Corp, is seeking 1 million tonnes of LNG a year for delivery over 10 years starting from 2023, said six industry sources.
Offers are due by Friday and will remain valid until mid-August, one of the sources said.
Sinopec declined to comment.
The firm is likely seeking long-term LNG at a time when prices for both long-term contracts and spot cargoes are low, a second source said.
Asian spot LNG prices LNG-AS, which buyers are increasingly using as a gauge to negotiate their long-term contracts, are hovering near record lows.
Prices of long-term contracts that are typically priced on Brent oil are also being negotiated at lower levels.
“Expectations for long-term demand are still bullish so it’s a good time to buy long-term cargoes,” another of the sources, based in Beijing said, declining to be named as he was not authorized to speak with media.
“It’s the lowest price range now and so is a good time to discuss long-term deals.”
Sinopec is also looking for volumes from the United States as part of the tender requirement, a fourth source said.
Sinopec, expected to be the next major Chinese buyer of U.S. LNG, had been in discussions with Houston-based Cheniere Energy to sign a 20-year deal but Reuters reported in January that both companies were planning to review terms of the deal after a sharp drop in prices.
China’s long-term gas demand is expected to grow, stoked by the country’s push to shift to the cleaner fuel from coal.
Related News
Related News

- Enbridge Plans 86-Mile Pipeline Expansion, Bringing 850 Workers to Northern B.C.
- Intensity, Rainbow Energy to Build 344-Mile Gas Pipeline Across North Dakota
- U.S. Moves to Block Enterprise Products’ Exports to China Over Security Risk
- Strike Pioneers First-of-Its-Kind Pipe-in-Pipe Installation on Gulf Coast with Enbridge
- 208-Mile Mississippi-to-Alabama Gas Pipeline Moves Into FERC Review
- U.S. Pipeline Expansion to Add 99 Bcf/d, Mostly for LNG Export, Report Finds
- A Systematic Approach To Ensuring Pipeline Integrity
- 275-Mile Texas-to-Oklahoma Gas Pipeline Enters Open Season
- LNG Canada Start-Up Fails to Lift Gas Prices Amid Supply Glut
- Strike Pioneers First-of-Its-Kind Pipe-in-Pipe Installation on Gulf Coast with Enbridge
Comments