- Chinese firms sign new LNG deals tied to the U.S. Henry Hub benchmark despite a 15% tariff on American imports.
- GPRIMG and Guangzhou Gas lead the shift, favouring gas-indexed pricing over traditional oil-linked contracts.
- Move signals market shift, pressuring global LNG suppliers like Qatar and Australia to adjust pricing strategies.
Chinese energy firms continue to strike long-term LNG contracts tied to the U.S. Henry Hub benchmark, even as trade tensions rise and Beijing enforces a new 15% tariff on American gas imports.
Guangdong Pearl River Investment Management Group (GPRIMG) signed a 15-year deal with U.S. oil major ConocoPhillips. The agreement covers 300,000 metric tons of LNG annually starting in 2028. Pricing includes 121% of the Henry Hub index plus a $4.50 premium per million British thermal units (MMBtu).
Guangzhou Gas Group secured a five-year contract with Switzerland-based Mercuria Energy Trading. Deliveries begin in 2026. The deal uses the Japan Korea Marker (JKM) index in the first year, then shifts to the Henry Hub from the second year onward.
Chinese buyers, traditionally reliant on oil-indexed LNG contracts, now lean toward gas-specific pricing. The Henry Hub, located in Louisiana, offers transparent and market-driven prices. Chinese firms want more stability as global energy prices fluctuate.
In recent months, many Chinese companies have rerouted U.S. LNG cargoes to Europe. By selling the cargoes abroad, they avoided the 15% import tariff. They return to U.S. suppliers using new pricing models, even with those barriers.
Energy analysts see this as a strategic step. “Chinese buyers trust U.S. pricing mechanisms, even with the tariffs in place,” said one Shanghai-based analyst. “They want long-term security.”
This shift could reshape the LNG market. China ranks as the world’s largest LNG importer. If more Chinese firms adopt Henry Hub pricing, traditional suppliers like Russia, Australia, and Qatar may need to adapt.
These exporters still use oil-linked pricing. However, with China changing course, they face growing pressure to offer more competitive and transparent gas-based terms.
Analysts note that Henry Hub contracts may protect buyers from unpredictable oil markets. In a time of global uncertainty, Chinese companies seek predictable costs and diversified supply chains.
Despite political friction, Chinese firms still engage U.S. energy producers. Their recent actions show that commercial needs continue to drive decisions. They prioritise price stability and secure supplies.
These new contracts signal cautious re-engagement with U.S. LNG. They also reflect a larger trend across Asia toward gas-indexed pricing.
If Chinese firms maintain this direction, they could influence broader regional pricing norms. Other Asian buyers may follow suit, potentially weakening the dominance of oil-indexed contracts.
Chinese companies now move deliberately. They evaluate market risks while building long-term supply strategies. The Henry Hub contracts mark a turning point in their global energy trade approach.
This trend could strengthen U.S.-China energy ties and trigger a wave of competitive adjustments from global LNG suppliers.