China's Proposed LNG Tariff Jeopardizes U.S. Projects
Billions of dollars in new export terminal projects are now at risk as China's retaliatory measures extend to the U.S. liquefied natural gas (LNG) sector. China's newly proposed 25% tariff on U.S. LNG imports could place $200 billion in unsanctioned project development along the Gulf Coast at risk.
U.S. developers seeking to secure sales contracts to fund construction require unfettered trade access to the world's largest growing LNG market. China's is now the third-largest buyer of U.S. LNG and is on track to triple natural gas demand by 2040.
If implemented, the tariffs will likely shift LNG development forward in Western Canada, the Middle East, Russia and Africa, pushing out further development opportunities domestically. If LNG producers can't trade with China, they are left with selling to markets not ready for long-term contract sales, which will likely delay funding for many developers if the tariff is implemented.