19 February, Monday


Russia bypasses US sanctions?

Analytical Wing

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The largest natural gas exporter in the U.S. announced two major deals with China on Friday to sell U.S. natural gas through the 2040s. Cheniere Energy agreed to supply China's state-owned energy company with 1.2 million tons of liquefied natural gas, or LNG, per year. As Washington Examiner writes in an article "US' largest natural gas exporter announces huge deal with China", the long-term supply and purchase agreements were built on a Memorandum of Understanding the company signed with China's energy authority in November.
 
Cheniere will begin shipping a portion of the fuel from its LNG export facility at Sabine Pass, La., later this year. The rest of the fuel will be made from its second facility being built in Corpus Christi, Texas, beginning in 2023. The supply and purchase agreements extend through 2043. The company is in the middle of completing its Corpus Christi facility, which now will include a third natural gas export station as an addition to its original design. Each export station is able to serve one LNG shipping vessel. Once all production facilities are up and running, the company will be one of the top five exporters of LNG in the world. The company began shipping fuel to China from Sabine Pass in 2017 with a single shipment. But China is looking to boost its imports of energy to support its plan to phase out its coal power plants in favor of cleaner-burning natural gas. The announcement would boost President Trump's energy dominance agenda that looks to increase energy exports abroad.
 
The U.S. became a net natural gas exporter in 2017, shipping more natural gas to other countries than it receives each year as imports. The Energy Information Administration projected this week that the U.S. will become a net oil exporter in 2022, adding to the country's increasing export status. Republicans on Friday hailed the company's announcement as a move to support the president's vision, while Democrats took a different tack. “This is great news for working families in Louisiana,” said Republican Sen. Bill Cassidy of Louisiana, home of the Sabine Pass facility. “From the wellhead to the liquefaction facility, people in Louisiana will benefit from selling more American-made energy," the senator said. "This is another example of Louisiana fueling America’s energy dominance and reaping the economic benefits of trade.”
 
Meanwhile, Democratic Sen. Ed Markey of Massachusetts, who sits on the Foreign Relations Committee, called on the State Department and Treasury to probe imports of LNG from Russia that may have violated U.S. sanctions. Massachusetts is dependent on natural gas imports from other countries, given New England's historic energy supply constraints. A shipment of LNG that docked in Boston last week may have contained Russian-produced fuel, even though it reached the U.S. under a different country's flag. In a letter to Secretary of State Rex Tillerson and Treasury Secretary Steven Mnuchin, Markey said that although the natural gas was only partially sourced from Russia, the purchase of the fuel provides revenue to Russia's largest natural gas company, Novatek, which is a violation of sanctions.
 

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