China resold several U.S. liquefied natural gas shipments to Europe, a rare move by the world’s top buyer that highlights how sky-high prices are rerouting trade flows.
Unipec, the trading arm of China’s state-owned Sinopec, sold at least three LNG cargoes for delivery through June to ports in Europe via a tender that closed late last week, according to traders with knowledge of the matter. The shipments will load from Venture Global LNG Inc.’s Calcasieu Pass export facility in Louisiana, where Sinopec has a deal to purchase LNG, they said, requesting anonymity to discuss private details.
European natural gas rates surged to a record high last week on fears that the war in Ukraine will curb flows from top supplier Russia. The rally prompted Unipec’s traders to turn away from the lower-priced Chinese market, even as Beijing demand its importers secure more fuel amid concerns over wartime disruptions.
European gas usually trades at a discount to LNG in North Asia, home to the top importers. But Europe’s plan to ditch Russian gas means that it will need to significantly boost LNG imports, with the continent’s prices primed to stay higher than Asian rates as it seeks to attract every drop of fuel from the spot market.
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