Trade war: China’s natural gas tariff will kill off US projects, says Canadian firm
The 10 per cent surcharge on imports from the US ‘will leave American companies dead in the water’
LNG Canada challenged competing US liquefied natural gas (LNG) projects on Monday, saying many could end up “dead in the water” as long as China keeps its tariff on US imports of the fuel as part of the trade war between the countries.
China in September announced a 10 per cent tariff on LNG imports from the United States as part of the escalating trade dispute between the world’s two biggest economies.
This month, Royal Dutch Shell said it received a final investment decision for its US$31 billion LNG Canada project, which is expected to start exporting in 2025.
Speaking at an industry event in Nagoya on Monday, LNG Canada chief executive Andy Calitz said the decision “was irrespective” of Chinese tariffs on US LNG, but added such measures would make US LNG less competitive.
“The world has become so competitive that if we are to face a 10 per cent surcharge tariff on LNG, then as far as I’m concerned, you’re dead in the water. So I’m very happy to be in Canada,” he told Reuters.
Current US LNG exports remain competitive despite the 10 per cent surcharge into China, as US natural gas is cheap thanks to booming shale output, allowing exporters to offer LNG at competitive rates.