First US LNG cargo in 17 months reaches China, re-export expected

A US LNG cargo has arrived in China for the first time in 17 months, marking the first delivery since US LNG shipments to China halted following an escalation in trade tensions and tariffs between the two countries. Market participants, however, expect the cargo to be re-exported rather than consumed domestically.

Kpler data show the QatarEnergy-operated LNG carrier Al Fat'h berthed today at the PipeChina Yangpu LNG terminal in Hainan carrying a cargo loaded at Venture Global's 20 mtpa Plaquemines LNG export project in Louisiana.

The arrival is the first since US LNG deliveries to China halted in February 2025 following China's imposition of additional tariffs on US imports during the latest escalation in US-China trade tensions.

According to shipping documents seen by Kpler's sources, QatarEnergy Trading is identified as the cargo's consignee and Venture Global as the consignor. Market participants said the cargo was likely sold by QatarEnergy Trading to state-owned PetroChina on a delivered ex-ship (DES) basis, although Kpler could not independently confirm the commercial arrangement.

Despite arriving in China, market participants expect the cargo to be re-exported rather than marketed domestically, citing weak gas demand and stronger economics for selling LNG into other Asian markets.

"The cargo would more likely have gone to a southern mainland terminal and entered the domestic pipeline network if domestic supplies were tight," said Nelson Xiong, Senior LNG and Natural Gas Analyst at Kpler Insight.

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"Hainan's gas balance is not particularly tight, and it makes more economic sense to sell the cargo into Southeast or Northeast Asia at current spot prices than to absorb it into the domestic market," he added.

Yangpu was China's first LNG terminal to receive bonded status, allowing LNG cargoes to be stored and subsequently re-exported without entering China's domestic market. Cargoes that remain within the bonded zone are exempt from China's import tariffs, making the terminal well suited for international trading and re-export. PetroChina, which has a 29.9^ stake in PipeChina, has previously used Yangpu for LNG re-export and LNG bunkering operations.

Firmer international LNG prices following renewed tensions around the Strait of Hormuz have meanwhile improved the economics of re-exporting cargoes from bonded storage rather than marketing them within China.

Market participants said China's domestic gas market is currently well supplied, citing falling domestic gas prices, softer LNG truck prices and weak buying interest in recent gas auctions.A recent auction offering around 200 million m³ of gas for the second half of July was not fully subscribed, with around 21 million m³ remaining unsold, they said.

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