China is reselling natural gas to energy-strapped Europe as its economic slowdown leaves it with a surplus, report says
- China is reselling natural gas to Europe as an economic slowdown leaves it with a surplus, Nikkei reported.
- Europe faces a severe energy crisis after Russia slashed the flow of gas to the continent.
China's economic slowdown has left it with a surplus of natural gas that it is re-selling to energy-strapped Europe, according to a report.
Boosted by cargoes from China, Europe's imports of liquefied natural gas jumped 60% year-on-year in the first half of 2002, according to a Nikkei report citing data from research firm Kpler.
China's economy has slowed sharply in 2022 as Beijing implemented a strict zero-COVID policy and as a crisis grips the country's highly indebted property sector. Economists think it is likely to fall well short of the government's aim of 5.5% growth.
The economic slowdown has left some Chinese companies with a surplus of natural gas — and they have been able to export this to Europe, where countries face a severe energy crisis.
More than 4 million tonnes of Chinese LNG has probably been resold — or roughly 7% of Europe's imports in the first half of the year — according to Nikkei.
Local media reported that Sinopec, China's state-owned energy giant, has sold 45 cargoes of the gas on the international market.
On top of the economic slowdown, an increase in coal-powered domestic energy supply has lowered the demand for natural gas in China, the report said.
The timing is somewhat fortunate for Europe, which is staring down a major energy crisis after Russia slashed the flow of natural gas through the Nord Stream 1 pipeline to just 20% of capacity.
Europe is racing to fill its natural gas storage facilities ahead of what could be an extremely tough winter.
It has also been importing LNG from the US, where the fossil fuel is more readily available. That has provided some traders and energy companies with huge profits.
Natural gas prices have soared in Europe to record highs, rising to well above levels in other major markets. However, they have fallen sharply over the past two days as officials have said storage facilities are filling up more quickly than previously hoped.