Sources: Sinopec Buys Over 30 LNG Cargoes for Winter Demand, Trading
(Reuters) — China's Sinopec Corp has bought more than 30 cargoes of LNG via a tender for October 2023 to the end of 2024 to cover Chinese winter demand and boost the supply pool for trading, traders said.
The awards are bigger than the 25 shipments sought by the company and came after muted Chinese spot demand so far in 2023, underpinning Asian spot LNG prices which last held at $13/MMBtu.
Sinopec's awarded shipments are on a delivered ex-ship basis into China, Japan, South Korea and Taiwan, including 11 shipments for deliveries into China during the last three months of 2023, one of the sources said.
The larger-than-expected purchases were also to cover a supply gap from U.S. exporter Venture Global, said three sources with knowledge of the matter.
"The tender is for both securing supply for winter and topping up supply pool. Sinopec is short near-term because Venture Global has failed to supply," said a Beijing-based source familiar with Sinopec's LNG business, who declined to be named due to company policy.
A Sinopec representative said the tender is "a usual move this time of the year to ensure winter demand”, but declined to comment on the tender result or the supply situation with Venture Global.
Venture Global did not respond to Reuters' email seeking comment.
Sinopec agreed in late 2021 a three-year purchase agreement with Venture Global for one million tons of annual supply from Calcasieu Pass terminal in Louisiana starting March 2023.
Venture Global is in the midst of arbitration cases with major clients like Shell and BP for failing to deliver contractual shipments.
Under the tender, Sinopec bought from more than 10 suppliers at premiums in single-digit cents over Asian benchmark JKM quotes, the source added.
Suppliers include traders Vitol and Glencore, global portfolio players Shell and BP, Middle East exporter ADNOC, state-run Chinese trader PetroChina International and others, sources said.
Sinopec's tender also reflects the company's attempt to recoup lost domestic market share after lagging behind in overall imports so far this year versus domestic peers PetroChina and CNOOC, said a second source, a state gas trader.
After posting a rare decline and handing back its top importer's title to Japan last year, China's total gas demand is expected to grow 7.4% this year, according to consultancy SIA Energy.
"We see continued structural growth in the city-gas distribution and power sector," said Na Min, head of Asia LNG with Energy Aspects, adding that the industrial sector is also set to return to growth this year despite macroeconomic headwinds.
That demand growth would mostly be met by robust domestic gas production, higher piped gas imports from central Asia and Russia, as well as long-term LNG contracts, analysts and traders said.
Related News
Related News

- 1,000-Mile Pipeline Exit Plan by Hope Gas Alarms West Virginia Producers
- Valero Plans to Shut California Refinery, Takes $1.1 Billion Hit
- Greenpeace Ordered to Pay $667 Million to Energy Transfer Over Dakota Access Pipeline Protests
- Three Killed, Two Injured in Accident at LNG Construction Site in Texas
- Boardwalk’s Texas Gas Launches Open Season for 2 Bcf/d Marcellus-to-Louisiana Pipeline Expansion
- New Alternatives for Noise Reduction in Gas Pipelines
- Construction Begins on Ghana's $12 Billion Petroleum Hub, But Not Without Doubts
- Missouri Loses Control Over 1.5 Million-Mile Gas Pipeline Network as Feds Step In
- South Dakota Governor Signs Bill Banning Eminent Domain for Carbon Pipeline
- Woodside May Delay Final Investment Decision on Louisiana LNG to Q2, CEO Says
Comments