Even if a permanent trade deal doesn’t materialize from ongoing negotiations, some analysts feel its only natural that the U.S. and China resume their natural gas trading. According to CNBC, China and the U.S. are reportedly working out a plan to address trade, such as assuring American companies have access to Chinese markets to protecting U.S. intellectual property.
Both economic superpowers are now more flexible with respect to altering the March 1 deadline to strike a trade deal, but this will delay the removal of China’s current 10 percent tax on U.S. natural gas.
“They’re certainly a very good fit,” said Alex Munton, principal analyst for gas and LNG at energy research firm Wood Mackenzie. “On the one hand, China is the fastest growing LNG market and the U.S. is the fastest growing LNG supplier.”
Additionally, the tariffs are creating uncertainty for natural gas developers who want to line up Chinese buyers like Australia’s LNG Limited. The company said talks with potential Chinese customers were in limbo due to the tariffs, which forced it to delay financing for its planned Magnolia export terminal in Louisiana.
“Clearly there is an issue for some projects if they are targeting the China market,” Munton said. “We do think it’s going to be difficult in the current context for deals to be signed.”
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