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Page added on May 22, 2017
China Love for US Gas Begins as Trump Rolls Out Red Carpet
Let the gushing begin.
After an executive from U.S. liquefied natural gas exporter Cheniere Energy Inc. spoke to a few hundred people at a conference in Beijing last week, the first question from the audience turned out to be an invitation to visit one of China’s biggest energy firms and a main LNG buyer, the state-owned giant known as Sinopec.
“We are very happy to always come to your office, Mr. Chen Bo, and discuss the supply of U.S. LNG to China,” Andrew Walker said in front of an amused audience, responding to the chief of Sinopec’s trading arm.
The exchange highlighted a budding relationship between U.S. gas sellers and Chinese buyers after an agreement struck this month by the Trump administration and President Xi Jinping’s government welcomed the Asian country’s investments and purchases of American gas.
“The trade deal paves the way for Chinese support into U.S. LNG in both existing and potential future projects,” said Kerry Anne Shanks, a Singapore-based analyst at Wood Mackenzie Ltd. That includes immediate LNG sales or signing long-term contracts to underpin financing of new plants.
Gas is poised to play a larger role in U.S.-China trade relations as the Trump administration works to trim a trade deficit and as the world’s largest energy consumer seeks to boost the share of natural gas in its energy mix and lower prices that last year were the world’s highest.
While the trade deal announced May 11 doesn’t appear to alter access for Chinese companies to U.S. gas cargoes, it welcomes China to receive shipments and engage in long-term contracts. That may be able to ease concerns in China that involvement in the U.S. LNG industry would be met with wariness.
‘That Fear’
“There’s never been anything formally that said there are restrictions on Chinese buyers,” Shanks said. “But there’s always been that fear.”
U.S. supplies accounted for almost 7 percent of China’s LNG imports in March, customs data show. But these cargoes were supplied to end-users through intermediaries or spot deals since China currently has no long-term contracts to directly buy American gas.
Longer supply contracts, which can run more than 20 years, traditionally help underpin the financing of export projects by providing lenders with confidence the developments will have stable customers. They also strengthen the relationship between the buyer and the plant operator or gas producer, opening the door to investing directly in the export plants.
China National Petroleum Corp. Chairman Wang Yilin said earlier this month that the country’s biggest oil and gas company wants to import more U.S. supplies and will consider participating in projects. Sinopec’s trading unit, Unipec, is considering the U.S., among other producers, for possible long-term LNG contracts for supply starting around 2022, Chen said Wednesday at the CWC China LNG & Gas International Summit & Exhibition.
Trading Cargoes
China International United Petroleum & Chemicals Co., as Unipec is officially known, may use the cargoes for both domestic demand as well as for its trading book. The company resold about 20 percent of its 10 million tons of annual supply last year to Europe, the Middle East and Mexico, Chen said.
ENN Energy Holdings Ltd., one of the country’s biggest gas distributors and a budding LNG importer, is considering U.S. supplies if it offers acceptable price and flexibility, Vice President Ma Shenyuan said at the same event in Beijing.
“U.S. gas will be the cheapest of all because they have abundant supply” and the Trump-Xi trade agreement is encouraging LNG shipments between the two countries, Zhu Xingshan, a senior director in the planning department of CNPC, said in Beijing last week. “Thus we should increase imports of U.S. LNG.”
Most of China’s long-term LNG supply contracts price shipments as a ratio to oil, with one Qatari deal struck in 2008 pricing it at as much as 16.3 percent the cost of crude, according to data compiled by Bloomberg New Energy Finance. U.S. LNG exports are priced off benchmark Henry Hub gas in Louisiana.
Natural gas for June delivery on the New York Mercantile Exchange rose 1.9 percent to $3.317 per million British thermal units at 8:18 a.m.
But with oil prices currently depressed, U.S. LNG imports have no cost advantage, said Ye Yishu, president of China National Offshore Oil Corp.’s gas and power trading arm. American gas may present a buying opportunity if crude rises above $70 a barrel, he said at the summit.
Options for China to secure U.S. LNG may include buying spare volumes from Cheniere’s Sabine Pass export terminal in Louisiana, which is currently the only U.S. exporter outside Alaska, financing an expansion of that project, or buying into one of a handful of new developments that have permission to export but still need financing, according to Wood Mackenzie’s Shanks.
China oil explorers aren’t the only ones being lured by cheap plentiful reserves and the possibility of greater sales from North America. Qatar Petroleum International Ltd. has teamed up with Exxon Mobil Corp. to build a $10 billion natural gas export plant in Texas, which won approval by federal energy regulators in December.
“We get asked a lot ‘Is there an unwritten rule that Chinese buyers can’t buy from the U.S.?’ and this clearly laid out the words ‘We welcome Chinese purchases,”’ Cheniere’s Walker said of the recent trade deal. “We very much look forward to continuing our conversations with our various potential customers.”
37 Comments on "China Love for US Gas Begins as Trump Rolls Out Red Carpet"
CIA-MOLE on Mon, 22nd May 2017 9:00 pm
America exports energy and pollution to China in return for finished goods. Chinese will tolerate environmental degradation due to manufacturing. This is standard for early industrialized nations but it will be steady state for China. China will export rich people to Canada and the US because these people desire clean living environment.
This is just another version of Orwell’s “1984” but it’s economic, not political as originally written.
antaris on Mon, 22nd May 2017 9:54 pm
Good thing we have lots of wood in the mountains of BC. When things get cold in a few years and the gas is gone we might survive. Sorry for the folks the permitting people wouldn’t allow fireplaces or stoves. Maybe someone can mass produce a device turning Chinese plastic shit into heat.
makati1 on Mon, 22nd May 2017 11:26 pm
Antaris, the wood is mostly conifers, correct? How many trees will you need per year? 10? 20? More? How many families in BC? How many trees per acre? Just asking.
I once calculated that if the U$ had to rely on wood to heat and cook, it would be nude of trees in 2-3 years. Totally nude. Canada may last a bit longer, but it has colder temps. Interesting problem.
Cloggie on Tue, 23rd May 2017 1:01 am
Trump does what Trump does best:
https://www.amazon.com/Trump-Art-Deal-Donald-J-ebook/dp/B000SEGE6M/ref=sr_1_1?ie=UTF8
A good thing for the US trade balance with China. For the rest I trust the Chinese to use to gas to build solar and wind parks, no?
Cloggie on Tue, 23rd May 2017 1:10 am
I once calculated that if the U$ had to rely on wood to heat and cook, it would be nude of trees in 2-3 years. Totally nude. Canada may last a bit longer, but it has colder temps. Interesting problem.
Picked up somewhere that for every human there are 61 trees:
http://www.npr.org/templates/story/story.php?storyId=96758439
Thanks NASA, who apparently went in the tree counting business after their space business is boldly going nowhere. How about every human planting 61 trees in his life, rather than for instance going to Mecca or Acapulco?
https://deepresource.wordpress.com/2017/05/22/land-life-company-desert-reforestation-with-cocoon/
I chopped all 15 mid-sized trees from my garden to catch every sun ray for vegetable growing and (later) for space heating with thermal solar and have the wood blocks neatly piled up for a rainy (icy) day. Probably just enough for 3 seasons.
makati1 on Tue, 23rd May 2017 1:48 am
Cloggie, for a few winters in the 80s, I used gypsy moth killed red oaks for heating a small home in PA. I burned eight or nine 14 to 16 diameter oaks in 3 months. That would cover about 1/4 acre of woods. My sister goes thru about a half cord of wood a winter just for the few days the electric is off due to storms. All the trees in the world would not last the 7 billion of us for more than a few years.
GregT on Tue, 23rd May 2017 2:20 am
“I burned eight or nine 14 to 16 diameter oaks in 3 months.”
One 16″ diameter fir tree around these parts yields around a chord of wood. I have 60 of them stacked up at the back of my property after clearing one acre of land. We normally burn 2 to 3 chords of wood per winter, although last year was abnormally cold and we went through almost 4 chords. I have somewhere between 15 and 30 years worth of firewood laying on the ground as we speak, and that does not include all of the smaller branches that I have been burning 24/7 for the last week. From the back of my property, there are over 8000 hectares of forest, with no other human settlements for hundreds of miles. There is no way that the people in this area burning trees for heat, could possibly even put a minor dent in the forests around here in a hundred lifetimes, and the trees would grow back much faster than they could be burned.
Cloggie on Tue, 23rd May 2017 4:01 am
Insects could replace fish and meat as an efficient source of food:
https://deepresource.wordpress.com/2017/05/23/protix-insects-replacing-fish-as-protein-source/
onlooker on Tue, 23rd May 2017 4:06 am
They already have in some places in Asia. Yuk
makati1 on Tue, 23rd May 2017 6:15 am
GregT, but wood rots. I don’t think you are being realistic, but believe what you want. My sister’s wood pile begins to deteriorate after 3-4 years of storage under a tarp. Insects and rot turns it into low energy dust. Oak, not pine.
And, cutting wood by hand (axe & hand saw) is going to be a real chore when that is the only way to use it. Do you have a horse to pull the logs to your house? Not to mention the coming forest fires, even in your country. I hope you are correct. Good luck!
makati1 on Tue, 23rd May 2017 6:30 am
Onlooker, many people would say “Yuck!” if they knew what was in that hotdog they love … lol
It’s all about what part of the world you live in and what you ate as a child. I think oysters are just slimy, gritty, repulsive fish bait. My friends here consider balut* a delicacy. I wouldn’t touch one, unless I was starving. lol
*Balut is a fertilized bird egg (usually a duck) that is incubated for 14 to 21 days, boiled or steamed, and the contents eaten direct from the shell.
https://search.yahoo.com/search?fr=mcafee&type=C111US91110D20160510&p=balut
Bon Appétit!
rockman on Tue, 23rd May 2017 6:40 am
CIA – “Chinese will tolerate environmental degradation due to manufacturing. This is standard for early industrialized nations…”. So you would categorize the USA as an “early industrialized nation”? After all we rank #2 right behind China when it comes to producing CO2 from the consumption of energy. Of course, on a per capita basis the US easily beats China.
And your “steady state” comment certainly fits: the US been at it a very long time and cumulatively produced more CO2 then the newbie China has produced. And the US is on a “steady” course to maintain our ranking.
onlooker on Tue, 23rd May 2017 6:44 am
Great point Mak. We all are conditioned in different ways depending on our culture and the experiences that we are cultured by.
It takes a conscious deliberate effort to reject these preferences
onlooker on Tue, 23rd May 2017 6:54 am
“Chinese will tolerate environmental degradation due to manufacturing. This is standard for early industrialized nations”
It occurs to me how this comment fits in so neatly into the contours of BAU in so far as Supply is responding to demand. Rockman stresses how consumers in US and worldwide have spearheaded the consumer culture because of their desire for it. It is a sobering point with much merit
deadlykillerbeaz on Tue, 23rd May 2017 7:25 am
Drive to Dease Lake in northern British Columbia and you’ll see forest for a long ways. From Prince George in BC to Johnson’s Crossing in The Yukon, there are hundreds of miles of trees.
Way up north, there are trees until the cows come home.
Go see Mt. Robson first though.
GregT on Tue, 23rd May 2017 9:45 am
mak,
“I don’t think you are being realistic, but believe what you want. My sister’s wood pile begins to deteriorate after 3-4 years of storage under a tarp.”
I wouldn’t even attempt to get through a winter with wood that was not cured for at least 2 years. 3 years is what most cure for, 4 or 5 years is even better. Your sister obviously has a lot to learn about firewood.
“And, cutting wood by hand (axe & hand saw) is going to be a real chore when that is the only way to use it.”
Exactly what people did for at least thousands of years before the industrial revolution. A real chore for sure, but perfectly doable.
“Do you have a horse to pull the logs to your house?”
Why would I pull the logs to my house? Much easier to move rounds than to move entire logs, they do have to be processed regardless of where they lie.
“Not to mention the coming forest fires, even in your country.”
Especially in this part of the world. There are millions of hectares of dead standing forests in BC due to climate change already. It is only a matter of time until there are firestorms of biblical proportions. Much of those trees have being drying out for over a decade. Once they have been ignited, there will be no possible way to put them out, even with modern industrial technologies. Fortunately, it is mostly pine forests that have been affected. No pine trees around here. Forest fires in general, however, remain to be of great concern.
Cloggie on Tue, 23rd May 2017 11:17 am
If properly stored (in the open with wind, not on the floor, but on apallet or something and under a roof) you can store fire wood for at least ten years. At some point worms etc. will “take it over”. But why would you want to store it that long?
Davy on Tue, 23rd May 2017 11:30 am
Clog, firewood has moisture in it. Depending on the type of wood stove or fire place you have the moisture has a significant impact on your burn. I use only oak and it requires a 2 year cure to get to a “dry” for burning. I use a traditional indoor woodstove. There are outdoor wood furnaces around here also. These heat water from outside the house and heat by a radiator and forced air. These need wet wood because of the way they burn wood with a fan. The wood at the top that is wet is cooked so by the time it drops down the fire box it is charcoal. The do better will wood that is not split like what comes out of the tops of the trees. Dry wood burns up too quick in them. The curing of wood properly also affects how long it will store. Wood not properly cured will rot quicker than wood split and covered with good air flow. You can get wood too dry and then it is better as a starter wood.
antaris on Tue, 23rd May 2017 12:45 pm
Mak, when we are at the stage that people need to heat with wood, because the Nat Gas is gone, I believe the populations will be much lower also. Thus the trees will never run out.
GregT on Tue, 23rd May 2017 1:21 pm
“At some point worms etc. will “take it over”. But why would you want to store it that long?”
I have pulled old cedar logs out of the forest here that were originally felled back in the 1930s. As long as they are not lying on the ground, or in wet areas, they still have perfectly good firewood in the centers. No worms around these parts that eat wood, and most insects only attack wood that has already been rotted by microorganisms.
Apneaman on Tue, 23rd May 2017 2:22 pm
The Cancer will consume it all – oil, coal, gas, wood.
‘My worst nightmares are coming true’: last major primeval forest in Europe on ‘brink of collapse’
Polish government is accused of pushing Białowieża forest ecosystem to point of no return with state-sanctioned logging in Unesco world heritage site
https://www.theguardian.com/environment/2017/may/23/worst-nightmare-europes-last-primeval-forest-brink-collapse-logging
AGW, 6th mass extinction well underway, thousands of warnings from the worlds scientists going on decades, irrefutable evidence and increasing drought, rain bombs, floods, wild fires, sea level rise, etc and the humans just keep going & going & going and keep breeding too. Carrying on like this and there will be a point where they drop off the cliff. Many know it and see it and still remain silent and carry on with their lives and planning for a future that will not happen. Every day the humans take another step or two closer to the edge. I read peoples comments all over the intertubes and many folks say they feel surreal – can’t believe it’s going down right in front of everyone’s face and there is no response and much denial from the overlords. This is actually normal human behavior. Collapse – this is how we do it.
https://www.youtube.com/watch?v=0hiUuL5uTKc
JuanP on Tue, 23rd May 2017 4:56 pm
I’ve seen piles of firewood that were decades old and still in good condition. We will burn a lot of wood in the future, more than ever before. Wildfires will become increasingly common, too. I expect most of the world’s forests to burn or rot before this century is over.
Go Speed Racer on Tue, 23rd May 2017 5:21 pm
What Makita said.
Greg the cords of wood are like a block of cheese in your fridge.
Perishable. Eventually gets moldy.
Stack wood onto the dirt and it will be filled with varmints after 1 single winter.
Put cement under it, and put a tarp over it, and it will still get nasty after 3 years.
Firewood is not to be stored in volume, other than maybe if it was sanded varnished and kept indoors.
Just cut a tree down 1 year in advance, and call it good?
I know about outdoor wood piles. Snakes Lizards Beetles Bees Rats next thing you know the whole woodpile sprouts legs and walks away.
makati1 on Tue, 23rd May 2017 5:43 pm
Go Speed, obviously you have observed the same deterioration that I have. Perhaps if you could store it inside, varmint free and dry, it would last a few years longer, but it would have to be in special conditions. The dryer it gets, the faster it would burn and the less heat it would give off. You should cut live trees about a year before you want to use it to lose the sap. Especially pine.
makati1 on Tue, 23rd May 2017 5:45 pm
BTW: Here, they make charcoal out of wood debris. That stores very well and does not attract snakes, like cobras. It is used for cooking as it never gets cold here.
GregT on Tue, 23rd May 2017 7:47 pm
“Stack wood onto the dirt and it will be filled with varmints after 1 single winter.
Put cement under it, and put a tarp over it, and it will still get nasty after 3 years.”
I have 3 1/2 cords of wood under cover, on the dirt, that are 4 and 5 years old. Perfectly cured, and no nastiness. You guys don’t have the slightest clue as to what you’re talking about.
GregT on Tue, 23rd May 2017 7:59 pm
“I’ve seen piles of firewood that were decades old and still in good condition.”
As have I. Several decades.
makati1 on Tue, 23rd May 2017 8:22 pm
GregT, what kind of wood. Pine? That is different from hardwoods. Also the kind of critters are different depending on location. I am speaking from my experience.
GregT on Tue, 23rd May 2017 9:44 pm
Mak,
Fir, Alder, Ash, Maple, Hemlock, Spuce, Cypress, and Cedar are all in my woodpiles. I prefer a mixture of Maple, Alder, and Fir though.
CIA-MOLE on Tue, 23rd May 2017 9:57 pm
you can burn all wood if you build a hybrid rocket stove. The later stage is rockety and the initial burn chamber is old fashioned wood stove.
There are many ways to explain rocket stove but I prefer a more fundamentalist principle that most chemical reactions have temperature as catalyst.
A rocket stove burns at high temperature and this means more efficient chemical reaction thus giving up more energy
GregT on Tue, 23rd May 2017 9:57 pm
Does firewood expire? If so, how can you make it last longer?
No matter how old wood is, if it is kept dry, it will burn. In fact, most old wood will burn better. Find yourself some 16th century antiques and try it out. They will burn brilliantly.
Good firewood will have less than 20% water weight, and less than 15% is even better.
Firewood will last longer than your lifetime if it is treated this way.
Tom Parks, Firebug, National Fireplace Institute Master Hearth Specialist.
https://www.quora.com/Does-firewood-expire-If-so-how-can-you-make-it-last-longer
CIA-MOLE on Tue, 23rd May 2017 10:00 pm
@GregT my logic says if you have extremely dry wood you could immerse it in water and it would be more efficient.
Remember that efficiency of a wood store also depends on the ability to remove heat. Burning very dry wood means quick and massive release of heat and it get wasted up the chimmey
makati1 on Tue, 23rd May 2017 10:11 pm
CIA, it also means a chimney fire if you burn a lot of uncured softwoods or hardwoods. The creosote builds up and needs cleaned out regularly. I don’t think many homes have the ability to heat or cook with wood anyway. No practical fireplaces or wood stoves. And, when they would be needed they would not be available on the market or the chimney materials to install them. IF the home owner actually knew how to do so. Wood burning is mostly a lost art. Not something easily learned when the SHTF.
GregT on Tue, 23rd May 2017 10:24 pm
CIA,
My wood stove manual specifically states that 18% moisture content is ideal. It also has baffles that burn gasses a second time before going up the chimney. When up to temperature, and used correctly, there is no smoke visible from the top of the chimney at all.
Mak,
Creosote is mainly a result of too low of a burn temperature. High moisture content in the wood is one cause, another is attempting to baffle the stove down. While you are correct that wood burning is mostly a lost art, it certainly is not around these parts. Everyone that I know here heats with wood, and many cook with it as well. I don’t cook with it myself, but certainly could if the need every arose.
CIA-MOLE on Tue, 23rd May 2017 10:27 pm
MAK, the second stage rocket stove means a clean burn. That’s why I said in another post that the hybrid design is agreeable with softwoods also.
GregT on Tue, 23rd May 2017 10:48 pm
CIA,
The vast majority of the wood that I burned the season before last was ‘softwoods’. 3 cords worth. I had my chimney swept in the spring. No creosote what so ever, and a very minute layer of grey ash. Softwoods or hardwoods make no difference, if the moisture content of the wood is correct ,and the burn is maintained at the right temperature.
makati1 on Wed, 24th May 2017 1:51 am
A few here know from experience how to use wood, but most do not. Another reason that the US will hurt more then most. No survival skills.