New China LNG threat with some importers told to halt Australian supplies
A new report indicates the $50bn LNG industry may be about to become the latest victim of China’s increasingly hostile trade war with Australia.
The nation’s $50bn LNG industry could be the latest victim of trade tensions between Canberra and Beijing with reports several Chinese importers have been told to avoid buying supplies of gas from Australia.
Two of China’s smaller liquefied natural gas importers were told to avoid buying new cargoes from Australia, Bloomberg News reported on Monday.
The Chinese importers have received verbal orders from government officials to avoid purchasing additional LNG from Australia for delivery over the next year, although bigger state-run importers have not received the same directive.
Last week China suspended an economic accord, the China-Australia Strategic Economic Dialogue, putting a scheduled meeting with Australia’s Treasurer and Trade Minister on ice indefinitely.
Australia, meanwhile, has torn up Victoria’s agreement to be part of China’s controversial “Blet and Road” initiative, and put the acquisition of the Port of Darwin by China’s Landbridge group under review.
Australia’s LNG industry has been largely immune from the escalating spat with Australia’s largest trade partner which has seen coal, wine, barley, beef, wheat, lobsters, cotton all targeted in the last year by Beijing.
The standoff has included $1bn of coal stranded off the Chinese coast for months on end, with the bulk vessels the latest conscripts in China’s sweeping campaign of trade warfare against Australia.
Still, the emergence of LNG as a target for China will put some of Australia’s biggest producers on edge.
China is the joint-largest export market for Australian LNG with 29m tonnes of the commodity sold to Beijing in 2020, according to consultancy EnergyQuest.
Woodside Petroleum in February said it had been forced to postpone talks to sell LNG to China, the world‘s biggest gas buyer, blaming an economic rift between Canberra and Beijing which have forced Australia’s largest LNG producer to find alternative markets.
That move ratcheted up the economic fallout between the nations after potential Chinese buyers pulled out of a deal in November to acquire a stake in the energy producer’s $16bn Scarborough gas project.
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