By The U.S. liquefied natural gas industry is confronting its worst crisis since the shale revolution as China’s retaliatory tariffs threaten to unravel a web of long-term supply contracts worth $12 billion annually. Cheniere Energy, the largest American LNG exporter, saw its shares plummet 14% this week after CNOOC declared force majeure on three 2024 cargoes from its Corpus Christi facility.
Contract Carnage:
- 20-year deals signed in 2021 now under renegotiation
- Take-or-pay clauses being tested in arbitration
- Asian premium over U.S. gas prices collapses to 1.20 from 4.50
Producer Pain Points:
- Storage Crunch: Freeport LNG reports tanks 92% full with no Chinese buyers
- Shipping Chaos: 11 LNG tankers idling off Singapore awaiting orders
- Price Bloodbath: July cargoes to Asia trading at 7.10 vs. 9.80 pre-tariff
“These tariffs have the potential to permanently alter global gas trade flows,” warned Energy Aspects’ Chong Zhi Xin. “U.S. producers may need to accept 15-20% price cuts to retain Asian customers.”