LNG’s Next Big Threat Isn’t Demand—It’s U.S. Policy

In a letter, PIMCO said that “Charging fees on ships calling at US ports due to Chinese origin of the calling ships, Chinese domestication of the operator, the operator’s fleet’s percentage of Chinese origin ships and the operator’s order book’s percentage of Chinese contracts, will significantly increase the cost of seaborne transport to and from the United States of America – even if operators are pursuing avoidance strategies.” Over the long term, then, U.S.LNG exporters could use South Korea-built vessels, but they need to ship their gas in the short term as well and this might become a problem unless the new port fee rule is tweaked to ensure the continued flow of U.S. LNG abroad. The bad news is that with every U.S. trade partner seeking more LNG imports to reduce its surplus with the world’s biggest market, the price can and likely will change soon enough and not in a favorable direction for the Europeans.

Author: Irina Slav

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