- Cheniere Energy (NYSEMKT:LNG) fell 2% and Tellurian (NASDAQ:TELL) tumbled nearly 6% yesterday when China said it may impose a 25% tariff on imports of U.S. liquefied natural gas as part of the escalating trade war between the two countries.
- Analysts say the proposed tariffs would have little short-term effect on U.S. LNG exports because cargoes could be routed to other Asian countries with growing demand for natural gas, but the tariffs eventually could undercut the competitiveness of U.S. LNG and the new export terminals planned for the Gulf Coast and elsewhere in the U.S.
- The greatest immediate impact from Chinese tariffs is expected to hit Cheniere, which has exported dozens of cargoes from its terminal in Sabine Pass, La., to China on a spot basis and has two long-term sales agreements with state-owned CNPC that supported its decision to build a third liquefaction unit at its Corpus Christi, Tex., facility.
- TELL, which is planning an export terminal near Lake Charles, La., has said more than 20 companies have expressed interest in investing in its project, which unlike others does not rely on long-term sales contracts.
- Dominion Energy (NYSE:D), which operates the Cove Point LNG export terminal in Maryland, says any tariffs imposed will not affect its customer contracts; none of the cargoes shipped so far from Cove Point under long-term agreements has been delivered to China.
- ETFs: UNG, UGAZ, DGAZ, BOIL, GASL, FCG, KOLD, UNL, GASX, DCNG, GAZB
- Now read: Natural Gas Flirts With Upside And Downside
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