Beijing has been accelerating its gas import to shift the country’s energy system away from coal and to combat with air pollution in China. The country is expected to be the world’s largest LNG importer by 2030. In this context, the long-term contract signed with Cheniere Energy, the first example of its kind, to supply LNG from the US to China has raised hopes for other companies to launch similar new export projects. Buyers in China will also encourage other willing suppliers, indicating that they can be persuaded to make long term commitments. China has become the third largest market for US LNG exports after Mexico and South Korea last year; but up to now the country has been buying spot cargoes instead of using long-term contracts which could finance exporters’ new facilities. China National Petroleum Corporation (CNPC) has signed a contract with Cheniere to purchase 1.2 million tons of LNG per year. Some shipments will continue to run from this year until 2043. – Financial Times

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