From Credit Suisse:
Concerns over Sinopec’s offtake volumes According to Petroleum Economist, Sinopec may “seek to delay the ramp-up of LNG production, as well as try to resell cargoes in the Asia Pacific markets” for its APLNG contract.
■ Why doesn’t China need/want the gas? Delays in Sinopec’s Guangxi terminal puts a physical restriction on receiving gas at the planned terminal. Whilst the volumes can be diverted elsewhere in China, domestic demand is weak (-6% in April 2015 yoy), due to weaker macro, oil’s fall, mild weather and high regulated gas prices.
