In a bearish global energy market, nobody can afford to ignore China. The world’s most populous country is roughly building one LNG terminal per year. It took forty years to France to build three.
In this huge territory criss-crossed by too few pipelines, many of the gas developments come from the sea. Strong industrial demand and severe winters attract a lot of players lured by high volatility. But there is no free lunch in the land of dim sum.
Not so long ago, a Trinidad-laden vessel was sailing to China. At that time, the Panama Canal wasn’t large enough for LNG vessels, so the voyage was set to take more than one month. It actually lasted even longer.
Once at port, the vessel couldn’t unload its cargo. Some people later said one authorization was missing, others reported that the customer didn’t provide credit support. Seller’s failure to deliver or Buyer’s failure to take ? The legal battle might have lasted quite long. Eventually, the ship made a U-turn and sold its cargo in India.
China will definitely play a key role on the LNG scene over the next decades. But the actors, on top of speaking Chinese, will have to be ready for some contractual kung fu.
photo (c) Jean-Christian Heintz