China’s Top LNG Buyer Refuses Cargoes Amid Virus Outbreak
Oil Price: China National Offshore Oil Corporation (CNOOC), the country’s largest importer of liquefied natural gas (LNG), has declared force majeure on deliveries of LNG cargoes and will not be honoring some of the deliveries because of the deadly coronavirus outbreak, Bloomberg reported on Thursday, quoting a notice that the Chinese firm had sent to suppliers. CNOOC has declared force majeure on prompt LNG supplies from at least three sellers for purchases this month and next, sources told Reuters. A week ago, the China Council for The Promotion of International Trade (CCPIT) announced that it would issue force majeure certificates to Chinese companies that have difficulties in meeting contract obligations with overseas partners amid the coronavirus outbreak and its fallout on the Chinese industrial activity and economy.
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Coronavirus could hit China’s 2020 natural gas demand
SP Global reports: The coronavirus outbreak in China threatens to curb domestic natural gas demand as economic activity slows and industries brace for disruptions, raising concerns about LNG import volumes in coming months. Consumer activity already slowed in January during the Lunar New Year holidays as movie theatres,
restaurants and tourist attractions shut in major cities, including Beijing where urban gas demand has skyrocketed in recent years. Industrial activity has also slowed as companies in the major manufacturing hubs of Shanghai, Zhejiang, Jiangsu, Guangdong and Chongqing extended holidays for an extra week until February 9. Factory supply chains risk being affected for even longer. With the outbreak worsening, quarantine measures and transportation restrictions are becoming tighter, making it tougher for hundreds of thousands, if not millions, of migrant workers to return to work. Factories are also finding it difficult to source raw materials or sell their products. This means that while gas demand for residential use could grow as most people stay indoors, the drop in demand from industrial, commercial and transportation sectors is likely to be much higher, market sources say. For more on this story visit spglobal.com or click https://bit.ly/2Oz40HV