Crikey, from Reuters:
China‘s state-controlled energy giant Sinopec wants to sell some long-term liquefied natural gas (LNG) import deals as a slowing economy makes them unprofitable, sources say, signalling the end of a five-year boom fuelled by rising Chinese demand.
…”We talk about China choking on LNG. There’s just too much coming onto the market,” said Gavin Thompson, Head of Asia Gas Research at Wood Mackenzie.
…”There is at least one SPA (Sales and Purchase Agreement) being negotiated with a Chinese buyer that has a lot of destination flexibility, including to terminals outside of China,” said one source involved in LNG shipments from Australia to China.
Sinopec is planning to offload LNG from new export plants in Australia and potentially Papua New Guinea to BP, advisory and trading sources with knowledge of the matter said, amid growing unease over the scale of an unprecedented expansion that has seen theconstruction of 11 LNG import terminals since 2006 and includes plans for 25 more projects.
BP and Sinopec declined to comment, but the sources said that, beyond selling excess cargoes into the spot market, other options being discussed included selling parts of its long-term agreements to another company.
Three industry sources said Sinopec was in early talks to sell off chunks of the 20-year, 4.3 million tonne per annum (mtpa) supply it bought from Origin Energy’s Australia Pacific LNG plant due to start in 2015.
Let’s see who buys and if not how the contract crumbles.