China Re-Reactivates LNG Re-Exports Amid Summer Supply Boom

China has resumed LNG re-exports after a three-month pause due to sufficient summer supply and stronger Northeast Asian spot prices. The first market-driven re-export from mainland China since April was recorded on July 10 when the Maran Gas Posidonia loaded 67,695 mt of LNG from CNOOC Gas & Power's Binhai LNG terminal and discharged it at Japan's Chita terminal.

A second cargo aboard the Mu Lan was recorded reloading LNG at Hainan on July 15 and departed for an undisclosed destination. Market participants said Thailand was a potential destination for the cargo, while another trader suggested that cargoes purchased for July delivery could generate more than $3/MMBtu in margin if sold into the spot market instead of the domestic Chinese market.

The economics of selling imported LNG into the domestic market have deteriorated significantly in recent weeks. According to traders, many of the cargoes purchased during April and May were acquired at around $16-$17/million British thermal units, while trucked LNG prices at eastern and southern coastal receiving terminals averaged around Yuan 5,923/mt so far in July.