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Abu Dhabi, UAEMonday 17 December 2018

Biggest Chinese gas importer upbeat on relations with US

CNPC signed the first long-term deal to import liquefied natural gas from the US in February

The logo of CNPC at the 26th World Gas Conference in Paris. The company says ties with the US will only strengthen despite tariff war. Benoit Tessier/Reuters
The logo of CNPC at the 26th World Gas Conference in Paris. The company says ties with the US will only strengthen despite tariff war. Benoit Tessier/Reuters

The head of China’s largest natural gas importer believes the country’s energy ties with the US are set to strengthen, despite trade conflict between the world’s two largest economies that has shaken financial markets.

“There is more room for cooperation than confrontation between China and the US,” China National Petroleum Corp chairman Wang Yilin said on the tropical island of Hainan, where he was attending the Boao Forum for Asia. “I hope our cooperation with US partners won’t be negatively affected by the trade disputes, I’m confident our cooperation will only get better and closer.”

China last week proposed tariffs on liquefied propane and petrochemicals from America, signalling it can strike the country’s energy industry if the dispute intensifies. Both the US and China proposed tariffs on $50bn of goods and President Donald Trump instructed his government to consider levies on an additional $100bn of Chinese products.

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CNPC signed the first long-term deal to import liquefied natural gas from the US in February in a deal that commits Cheniere Energy to sending 1.2 million tonnes a year of the fuel to China through 2043. The contract helps underpin an expansion of the gas export terminals in the Texas port city of Corpus Christi, the first phase of which may start later this year or 2019.

“We currently have great cooperation with many US-based companies such as Exxon Mobil, Chevron and ConocoPhillips,” said Mr Wang. “Economic globalisation is an irreversible historical trend.”

China, the world’s biggest energy user, is growing more reliant on overseas crude as its domestic reserves dwindle and economic growth spurs higher demand. CNPC and the country’s sovereign wealth fund, China Investment Corp, were said to be in talks to invest in the initial public offering of Aramco, Bloomberg News reported in March last year.

CNPC is closely following preparation for a listing by Saudi Arabia's state oil producer and “evaluating how to deepen our cooperation through the process”, Mr Wang said.