China’s Tariffs Could Hurt U.S. Gas Exports—Energy Journal - MoneyBeat

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CHINA TARIFF THREATENS U.S. LIQUEFIED NATURAL GAS BOOM

China’s move to impose tariffs on U.S. liquefied natural gas could hurt the American shale sector, write WSJ’s Georgi Kantchev and Christopher M. Matthews.

Retaliating against new Trump administration tariffs on $200 billion in Chinese goods, China on Tuesday issued levies on $60 billion of U.S. products, including a 10% tariff on liquefied natural gas, known as LNG.

China is the biggest source of new global LNG demand as the country steps up efforts to combat air pollution by shifting from coal-powered plants to natural gas and renewable energy sources. The U.S., which is emerging as a powerhouse in the global gas trade, was expected to mop up a big chunk of that demand.

“It’s a big deal for the U.S.-China gas trade,” said Ira Joseph, head of gas and power analytics at S&P Global Platts. “The tariffs will push Chinese buyers to other sellers in Asia and the Middle East because the U.S. will no longer be considered a low-cost option.”

LNG infrastructure could take an especially big hit, experts say.

U.S. oil and gas producers have been eagerly awaiting new export projects, which would create new demand to eat into a glut of natural gas that has kept the U.S. benchmark price below $4 per million British thermal units for years.

More than a dozen projects are awaiting regulatory approval in the U.S. If Chinese buyers become less willing to buy U.S. LNG, it could be more difficult for U.S. LNG exporters to finance the projects, which cost billions of dollars each to build.

Meanwhile, an unexpected rise in U.S. crude stockpiles kept oil prices mostly flat on Wednesday.
Brent, the global benchmark, was flat at $79.04 a barrel on London’s Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures edged down 0.17% to $69.73 a barrel.

U.K. CORRUPTION TRIAL TO HEAR FROM BIG OIL

U.K. prosecutors will call an executive from ConocoPhillips as a key witness in the London-based trial of four people charged with bribery to secure business related to a gas field in the North Sea, writes Mara Lemos Stein.

NORTH KOREA TO ALLOW OUTSIDE INSPECTORS TO VISIT MISSILE TEST SITE

North Korea agreed to allow outside inspectors to visit its missile test site and said it would be open to decommissioning its nuclear-enrichment facility, a bid by Kim Jong Un to break an impasse in negotiations with the U.S., and maintain talks with South Korea, write WSJ’s Jonathan Cheng and Dasl Yoon.

A NORWEGIAN OIL FIRM TURNS TO SOFTWARE ENGINEERS TO OPTIMIZE ITS OPERATIONS

Norway’s Aker BP set up its own in-house software group to come up with solutions to digitize its oil exploration and reduce operation costs, and now the unit, called Cognite, is selling its product to other oil firms such as Sweden’s Lundin Petroleum, Reuters reports.

BIG NUMBER: 71

An increasing number of companies are halting business operations in Iran following the decision by the U.S. to reimpose sanctions on the Middle Eastern country, reports the New York Times. A Washington-based group called the Foundation for Defense of Democracies estimates that 71 foreign firms plan to leave Iran, 19 aim to continue with their operations and 142 companies are undecided.

FUTURECURVE

Today: The U.S. Energy Information Administration releases its weekly petroleum status report.
Friday: Oil-services firm Baker Hughes Inc. releases its count of active drilling rigs, a bellwether for production in the U.S. oil industry.
Sept. 20: OPEC and external producers including Russia meet in Algiers.