- Major LNG buyers like Taiwan’s CPC and Germany’s SEFE are concerned about US supply reliability after the Biden administration paused export permits to non-FTA countries.
- Asian buyers are turning to traditional LNG suppliers who prioritise long-term relationships and offer greater flexibility in managing contract issues.
- Buyers are diversifying supply sources, including Russian LNG, to ensure energy security and reduce reliance on US exports.
Major LNG buyers have raised concerns after the Biden administration paused export permits to non-Free Trade Agreement (FTA) countries, casting uncertainty over US supplies. Asian and European companies are now rethinking their strategies.
At the Asia Pacific Petroleum Conference (APPEC), Jane Liao, Vice President of Taiwan’s CPC Corp, expressed doubts about US LNG reliability. “I trust traditional LNG suppliers more than US players,” Liao said. She explained that Asian buyers often prefer suppliers prioritising long-term relationships and are more flexible in addressing contract issues.
Liao noted that traditional suppliers are willing to negotiate in challenging times. “When difficulties arise, these suppliers sit down and talk,” she added. This reliance on trusted partners is critical for buyers like CPC, which prioritises energy security.
Germany-based SEFE, a key player in the global LNG market, echoed Liao’s concerns. Fabian Kor, SEFE’s Executive Vice President for Asia, said energy security is crucial, especially this year. SAFE is prepared to secure additional contracts to ensure stable supplies. “We may slightly over-contract to guarantee availability,” Kor noted.
SAFE is also reassessing its focus on US LNG. Although US supplies are often cheaper, Kor stressed the importance of diversifying sources. “We won’t concentrate on US supplies alone,” he said. “We prefer a mix of suppliers to reduce risks.”
The Biden administration’s decision has sparked uncertainty in global LNG markets, particularly in Asia. As buyers in the region depend heavily on secure supplies, many are now looking to traditional suppliers for reliability.
The issue of US LNG reliability has prompted buyers to consider other options, even if they come at a higher cost. SEFE and CPC, for instance, are focused on ensuring they are not overly dependent on any single source.
Regarding Russian LNG, Liao said continued purchases by China and India would keep the global market balanced. She suggested that if these countries buy from Russia, there will be less competition for other buyers. “Chinese and Indian purchases from Russia help ease market pressure,” she stated.
As energy security becomes a pressing issue, buyers are shifting away from sole reliance on US LNG. The uncertainties surrounding US supplies due to the export permit pause have made diversification necessary.
While the U.S. remains a critical LNG player, the move to pause exports has shaken confidence in its reliability. Buyers are now more cautious, seeking to spread out their sources to avoid potential disruptions.
In the face of global energy challenges, Asian and European LNG buyers focus on securing stable, diversified supplies. With their long-term relationships and consistent delivery, traditional LNG suppliers are increasingly considered more reliable amid the current uncertainty.
With energy security at the forefront, buyers like CPC and SEFE are adjusting their strategies to navigate a changing market landscape.