As Europe scrambles to avoid a disastrous energy crisis this winter, Chinese energy companies are selling excess gas to Europe at a massive profit, The Wall Street Journal reported.
The opportunity comes for Chinese companies as reduced economic activity at home has led to lower energy demands, while an impending ban on Russian natural gas imports and the alleged sabotage of the Nord Stream 2 pipeline has left Europe scrambling for a new supply, according to the WSJ. The source of this excess gas is primarily the U.S. — the two countries have several long-term contracts for the sale of natural gas that were implemented during the Trump administration — or Russia, which has ramped up gas shipments to China by 30% in 2022, according to the WSJ.
Shipments of liquified natural gas (LNG) from the U.S. are often being redirected from China to Europe, netting as much as $110 to $130 million dollars in some cases for the Chinese companies that were their original buyers, the WSJ reported. In the first eight months of last year, 133 U.S. vessels containing LNG docked in China, but only 19 had so far in 2022. (RELATED: European Countries Are On The Brink Of Economic Disaster, OECD Says)
“This would be a Russia that has already lost so many trading partners that it can survive only as an oil and natural gas colony of China, a Russia that is a failed state, spewing out instability from every pore.”
— Josh Kraushaar (@JoshKraushaar) October 1, 2022
“It’s allowed and the prices are favorable,” Wu Qiunan, chief economist at PetroChina International, a subsidiary of state-owned Chian National Petroleum Corp, told the WSJ.
Beyond reselling American shipments, China can resell around 15 million tons of excess LNG it is predicted to have by the end of 2022, according to the WSJ. After selling just a quarter of a million tons of LNG in the first eight months of the year for a total of $449 million, China has increased sales by more than 60 times compared to last year, when it sold just $7.3 million in LNG.
Chinese companies are unsure if the situation will continue much longer, as Beijing mulls loosening COVID-19 restrictions, and increased LNG supply from China, Africa, the Middle East and Latin America pushes prices down, the WSJ reported.
A European Commission spokesperson did not immediately respond to the Daily Caller News Foundation’s request for comment.
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