China plans to buy Russian LNG at a discount

China plans to buy Russian LNG at a discount
# 04 April 2022 14:44 (UTC +04:00)

Chinese importers of liquefied natural gas (LNG) expect to buy this raw material in Russia, as it is sold at a deep discount to the market price, the agency said. bloomberg citing sources familiar with the matter and traders, APA reports citing Oopstop.

“State-owned companies (of China – ed.), including Sinopec and Petroshina, are negotiating with suppliers to purchase spot LNG consignments from Russia at a big discount,” the agency said.

Traders told the agency that this LNG is sold at a discount of more than 10% compared to what is supplied from Central Asia. And while China is not experiencing a severe LNG shortage right now due to warm weather and easing covid fears, buying such cheap raw materials will allow the country to replenish its tanks before the seasonal price spike.

The sources also said that traders are holding off on large purchases for the time being, and some importers are considering using Russian firms to bid on LNG purchases on their behalf to hide their plans from other countries’ authorities.

The agency notes that such a move is similar to the actions of Chinese oil refineries, which “secretly buy cheap Russian oil.”

Russia launched a military operation in Ukraine on February 24. After that, foreign countries began to impose sanctions, and companies began to massively suspend their activities in the Russian Federation. In Europe, statements are periodically heard at various levels about the refusal to import Russian oil and gas, and individual restrictions are introduced at the company level. The United States has already banned the import of Russian energy resources, including oil, and by the end of the year, the United Kingdom plans to abandon oil from Russia.

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