China Is Quietly Reselling Its Excess Russian Lng To Europe

This, of course, is not to be confused with pipeline natural gas, where Russian producer Gazprom recently announced that daily supplies to China via the Power of Siberia pipeline had reached a new record high (Russia is the second largest natural gas pipeline China’s supplier after Turkmenistan), and earlier revealed that Russian pipeline gas supplies to China had increased by 63.4% in the first half of 2022. What’s behind this strange surge in Russian LNG imports, analysts speculate? After all, while China imports more than half of the natural gas it consumes, with about two-thirds in the form of LNG, demand this year had fallen sharply amid economic headwinds and widespread shutdowns. In other words, why increase Russian LNG when i) the domestic demand is simply not there and ii) at the expense of everyone else? “The increase in Russian LNG could be a shift in cargo going to Japan or South Korea because of sanctions or weaker demand there,” said Michal Meidan, director of the China energy program at the Oxford Institute for Energy Studies. One thing was clear: China wanted to keep its gas trade with Russia as opaque as possible, which is why China’s General Administration of Customs has stopped making public the distribution of pipeline gas trade volumes since its inception. year , with spokesman Li Kuiwen confirming that the move was to “protect the legitimate business rights and interests of relevant importers and exporters”. Well, now we know the answer: China has been quietly reselling Russian LNG to the one place that desperately needs it more than anything else. Europe… and of course, charges extra for a kidney in the process. As the FT recently reported, “Europe’s fears of gas shortages heading into winter may have been averted, thanks to an unexpected white knight: China.” The Nikkei-owned publication further notes that “the world’s largest buyer of liquefied natural gas is reselling some of its excess LNG cargoes due to low energy demand at home. This has provided the spot market with ample supply that Europe has tapped into, despite higher prices”. What the FT ignore, is that it is not a ‘surplus’ – after all, if it were Chinese imports of Russian LNG would collapse. No – the correct word to describe the LNG that China is selling to Europe is Russian. Going back to history, the details are intuitive: with the Russian gas pipeline to Europe effectively shut down… European LNG imports rose 60% year-on-year in the first six months of 2022, according to research firm Kpler. Some more details: China’s JOVO Group, a major LNG trader, recently disclosed that it had resold an LNG cargo to a European buyer. A futures trader in Shanghai told Nikkei that the profit from such a trade could be in the tens of millions of dollars or even reach $100 million. China’s biggest oil refiner Sinopec Group also acknowledged in an earnings call in April that it was pumping excess LNG into the international market. Local media reported that Sinopec alone sold 45 cargoes of LNG, or about 3.15 million tons. The total amount of Chinese LNG that has been resold is likely to be over 4 million tonnes, equivalent to 7 percent of Europe’s natural gas imports in the six months to the end of June. Make no mistake: all this “surplus” LNG was partially or fully soured in Russia, but after it has been “dioded” to China, it is no longer Russian. It’s anti – drumroll – Chinese LNG. The good news is that the 53 million tonnes the bloc bought exceeded imports from China and Japan and lifted Europe’s natural gas storage capacity to 77%. its natural gas storage facilities until November (then it will start draining reserves at breakneck speeds to keep warm during the winter). But while China’s economic downturn has brought much-needed relief to Europe, it comes with an important caveat. Once economic activity in China recovers, the situation will quickly reverse and Beijing will no longer re-export Russian LNG to keep Europe warm. Funny, it also means that instead of depending on Russia for gas, Europe now depends on Beijing for its energy – which is still Russian gas, only this time imported from China – which makes a mockery of the geopolitical ambitions of USA to defend a liberal international order with its own energy exports. Even worse, while Europe could buy Russian LNG at X price, it will have to pay 2X, 3X or more, just to virtue signal to the world that it will not fund Putin’s regime, when in fact it is paying extra to both Xi and Putin, who is commanding a premium thanks to the overall scarcity of the market. Without stating it explicitly, the FT implies that Europe buys Russian LNG through China: If Russia ends up exporting more gas to China as a means of punishing Europe, China will have a greater ability to resell its gas surplus on the spot market – indirectly helping Europe. From Zerohedge.com More top reads from Oilprice.com:

title: “China Is Quietly Reselling Its Excess Russian Lng To Europe Klmat” ShowToc: true date: “2022-12-01” author: “Bradley Hart”

This, of course, is not to be confused with pipeline natural gas, where Russian producer Gazprom recently announced that daily supplies to China via the Power of Siberia pipeline had reached a new record high (Russia is the second largest natural gas pipeline China’s supplier after Turkmenistan), and earlier revealed that Russian pipeline gas supplies to China had increased by 63.4% in the first half of 2022. What’s behind this strange surge in Russian LNG imports, analysts speculate? After all, while China imports more than half of the natural gas it consumes, with about two-thirds in the form of LNG, demand this year had fallen sharply amid economic headwinds and widespread shutdowns. In other words, why increase Russian LNG when i) the domestic demand is simply not there and ii) at the expense of everyone else? “The increase in Russian LNG could be a shift in cargo going to Japan or South Korea because of sanctions or weaker demand there,” said Michal Meidan, director of the China energy program at the Oxford Institute for Energy Studies. One thing was clear: China wanted to keep its gas trade with Russia as opaque as possible, which is why China’s General Administration of Customs has stopped making public the distribution of pipeline gas trade volumes since its inception. year , with spokesman Li Kuiwen confirming that the move was to “protect the legitimate business rights and interests of relevant importers and exporters”. Well, now we know the answer: China has been quietly reselling Russian LNG to the one place that desperately needs it more than anything else. Europe… and of course, charges extra for a kidney in the process. As the FT recently reported, “Europe’s fears of gas shortages heading into winter may have been averted, thanks to an unexpected white knight: China.” The Nikkei-owned publication further notes that “the world’s largest buyer of liquefied natural gas is reselling some of its excess LNG cargoes due to low energy demand at home. This has provided the spot market with ample supply that Europe has tapped into, despite higher prices”. What the FT ignore, is that it is not a ‘surplus’ – after all, if it were Chinese imports of Russian LNG would collapse. No – the correct word to describe the LNG that China is selling to Europe is Russian. Going back to history, the details are intuitive: with the Russian gas pipeline to Europe effectively shut down… European LNG imports rose 60% year-on-year in the first six months of 2022, according to research firm Kpler. Some more details: China’s JOVO Group, a major LNG trader, recently disclosed that it had resold an LNG cargo to a European buyer. A futures trader in Shanghai told Nikkei that the profit from such a trade could be in the tens of millions of dollars or even reach $100 million. China’s biggest oil refiner Sinopec Group also acknowledged in an earnings call in April that it was pumping excess LNG into the international market. Local media reported that Sinopec alone sold 45 cargoes of LNG, or about 3.15 million tons. The total amount of Chinese LNG that has been resold is likely to be over 4 million tonnes, equivalent to 7 percent of Europe’s natural gas imports in the six months to the end of June. Make no mistake: all this “surplus” LNG was partially or fully soured in Russia, but after it has been “dioded” to China, it is no longer Russian. It’s anti – drumroll – Chinese LNG. The good news is that the 53 million tonnes the bloc bought exceeded imports from China and Japan and lifted Europe’s natural gas storage capacity to 77%. its natural gas storage facilities until November (then it will start draining reserves at breakneck speeds to keep warm during the winter). But while China’s economic downturn has brought much-needed relief to Europe, it comes with an important caveat. Once economic activity in China recovers, the situation will quickly reverse and Beijing will no longer re-export Russian LNG to keep Europe warm. Funny, it also means that instead of depending on Russia for gas, Europe now depends on Beijing for its energy – which is still Russian gas, only this time imported from China – which makes a mockery of the geopolitical ambitions of USA to defend a liberal international order with its own energy exports. Even worse, while Europe could buy Russian LNG at X price, it will have to pay 2X, 3X or more, just to virtue signal to the world that it will not fund Putin’s regime, when in fact it is paying extra to both Xi and Putin, who is commanding a premium thanks to the overall scarcity of the market. Without stating it explicitly, the FT implies that Europe buys Russian LNG through China: If Russia ends up exporting more gas to China as a means of punishing Europe, China will have a greater ability to resell its gas surplus on the spot market – indirectly helping Europe. From Zerohedge.com More top reads from Oilprice.com:

title: “China Is Quietly Reselling Its Excess Russian Lng To Europe Klmat” ShowToc: true date: “2022-11-15” author: “Lora White”

This, of course, is not to be confused with pipeline natural gas, where Russian producer Gazprom recently announced that daily supplies to China via the Power of Siberia pipeline had reached a new record high (Russia is the second largest natural gas pipeline China’s supplier after Turkmenistan), and earlier revealed that Russian pipeline gas supplies to China had increased by 63.4% in the first half of 2022. What’s behind this strange surge in Russian LNG imports, analysts speculate? After all, while China imports more than half of the natural gas it consumes, with about two-thirds in the form of LNG, demand this year had fallen sharply amid economic headwinds and widespread shutdowns. In other words, why increase Russian LNG when i) the domestic demand is simply not there and ii) at the expense of everyone else? “The increase in Russian LNG could be a shift in cargo going to Japan or South Korea because of sanctions or weaker demand there,” said Michal Meidan, director of the China energy program at the Oxford Institute for Energy Studies. One thing was clear: China wanted to keep its gas trade with Russia as opaque as possible, which is why China’s General Administration of Customs has stopped making public the distribution of pipeline gas trade volumes since its inception. year , with spokesman Li Kuiwen confirming that the move was to “protect the legitimate business rights and interests of relevant importers and exporters”. Well, now we know the answer: China has been quietly reselling Russian LNG to the one place that desperately needs it more than anything else. Europe… and of course, charges extra for a kidney in the process. As the FT recently reported, “Europe’s fears of gas shortages heading into winter may have been averted, thanks to an unexpected white knight: China.” The Nikkei-owned publication further notes that “the world’s largest buyer of liquefied natural gas is reselling some of its excess LNG cargoes due to low energy demand at home. This has provided the spot market with ample supply that Europe has tapped into, despite higher prices”. What the FT ignore, is that it is not a ‘surplus’ – after all, if it were Chinese imports of Russian LNG would collapse. No – the correct word to describe the LNG that China is selling to Europe is Russian. Going back to history, the details are intuitive: with the Russian gas pipeline to Europe effectively shut down… European LNG imports rose 60% year-on-year in the first six months of 2022, according to research firm Kpler. Some more details: China’s JOVO Group, a major LNG trader, recently disclosed that it had resold an LNG cargo to a European buyer. A futures trader in Shanghai told Nikkei that the profit from such a trade could be in the tens of millions of dollars or even reach $100 million. China’s biggest oil refiner Sinopec Group also acknowledged in an earnings call in April that it was pumping excess LNG into the international market. Local media reported that Sinopec alone sold 45 cargoes of LNG, or about 3.15 million tons. The total amount of Chinese LNG that has been resold is likely to be over 4 million tonnes, equivalent to 7 percent of Europe’s natural gas imports in the six months to the end of June. Make no mistake: all this “surplus” LNG was partially or fully soured in Russia, but after it has been “dioded” to China, it is no longer Russian. It’s anti – drumroll – Chinese LNG. The good news is that the 53 million tonnes the bloc bought exceeded imports from China and Japan and lifted Europe’s natural gas storage capacity to 77%. its natural gas storage facilities until November (then it will start draining reserves at breakneck speeds to keep warm during the winter). But while China’s economic downturn has brought much-needed relief to Europe, it comes with an important caveat. Once economic activity in China recovers, the situation will quickly reverse and Beijing will no longer re-export Russian LNG to keep Europe warm. Funny, it also means that instead of depending on Russia for gas, Europe now depends on Beijing for its energy – which is still Russian gas, only this time imported from China – which makes a mockery of the geopolitical ambitions of USA to defend a liberal international order with its own energy exports. Even worse, while Europe could buy Russian LNG at X price, it will have to pay 2X, 3X or more, just to virtue signal to the world that it will not fund Putin’s regime, when in fact it is paying extra to both Xi and Putin, who is commanding a premium thanks to the overall scarcity of the market. Without stating it explicitly, the FT implies that Europe buys Russian LNG through China: If Russia ends up exporting more gas to China as a means of punishing Europe, China will have a greater ability to resell its gas surplus on the spot market – indirectly helping Europe. From Zerohedge.com More top reads from Oilprice.com:

title: “China Is Quietly Reselling Its Excess Russian Lng To Europe Klmat” ShowToc: true date: “2022-11-16” author: “Bob Nazario”

This, of course, is not to be confused with pipeline natural gas, where Russian producer Gazprom recently announced that daily supplies to China via the Power of Siberia pipeline had reached a new record high (Russia is the second largest natural gas pipeline China’s supplier after Turkmenistan), and earlier revealed that Russian pipeline gas supplies to China had increased by 63.4% in the first half of 2022. What’s behind this strange surge in Russian LNG imports, analysts speculate? After all, while China imports more than half of the natural gas it consumes, with about two-thirds in the form of LNG, demand this year had fallen sharply amid economic headwinds and widespread shutdowns. In other words, why increase Russian LNG when i) the domestic demand is simply not there and ii) at the expense of everyone else? “The increase in Russian LNG could be a shift in cargo going to Japan or South Korea because of sanctions or weaker demand there,” said Michal Meidan, director of the China energy program at the Oxford Institute for Energy Studies. One thing was clear: China wanted to keep its gas trade with Russia as opaque as possible, which is why China’s General Administration of Customs has stopped making public the distribution of pipeline gas trade volumes since its inception. year , with spokesman Li Kuiwen confirming that the move was to “protect the legitimate business rights and interests of relevant importers and exporters”. Well, now we know the answer: China has been quietly reselling Russian LNG to the one place that desperately needs it more than anything else. Europe… and of course, charges extra for a kidney in the process. As the FT recently reported, “Europe’s fears of gas shortages heading into winter may have been averted, thanks to an unexpected white knight: China.” The Nikkei-owned publication further notes that “the world’s largest buyer of liquefied natural gas is reselling some of its excess LNG cargoes due to low energy demand at home. This has provided the spot market with ample supply that Europe has tapped into, despite higher prices”. What the FT ignore, is that it is not a ‘surplus’ – after all, if it were Chinese imports of Russian LNG would collapse. No – the correct word to describe the LNG that China is selling to Europe is Russian. Going back to history, the details are intuitive: with the Russian gas pipeline to Europe effectively shut down… European LNG imports rose 60% year-on-year in the first six months of 2022, according to research firm Kpler. Some more details: China’s JOVO Group, a major LNG trader, recently disclosed that it had resold an LNG cargo to a European buyer. A futures trader in Shanghai told Nikkei that the profit from such a trade could be in the tens of millions of dollars or even reach $100 million. China’s biggest oil refiner Sinopec Group also acknowledged in an earnings call in April that it was pumping excess LNG into the international market. Local media reported that Sinopec alone sold 45 cargoes of LNG, or about 3.15 million tons. The total amount of Chinese LNG that has been resold is likely to be over 4 million tonnes, equivalent to 7 percent of Europe’s natural gas imports in the six months to the end of June. Make no mistake: all this “surplus” LNG was partially or fully soured in Russia, but after it has been “dioded” to China, it is no longer Russian. It’s anti – drumroll – Chinese LNG. The good news is that the 53 million tonnes the bloc bought exceeded imports from China and Japan and lifted Europe’s natural gas storage capacity to 77%. its natural gas storage facilities until November (then it will start draining reserves at breakneck speeds to keep warm during the winter). But while China’s economic downturn has brought much-needed relief to Europe, it comes with an important caveat. Once economic activity in China recovers, the situation will quickly reverse and Beijing will no longer re-export Russian LNG to keep Europe warm. Funny, it also means that instead of depending on Russia for gas, Europe now depends on Beijing for its energy – which is still Russian gas, only this time imported from China – which makes a mockery of the geopolitical ambitions of USA to defend a liberal international order with its own energy exports. Even worse, while Europe could buy Russian LNG at X price, it will have to pay 2X, 3X or more, just to virtue signal to the world that it will not fund Putin’s regime, when in fact it is paying extra to both Xi and Putin, who is commanding a premium thanks to the overall scarcity of the market. Without stating it explicitly, the FT implies that Europe buys Russian LNG through China: If Russia ends up exporting more gas to China as a means of punishing Europe, China will have a greater ability to resell its gas surplus on the spot market – indirectly helping Europe. From Zerohedge.com More top reads from Oilprice.com: