China coronavirus force majeure option unsettles LNG market

This virus is an opportunity for China to shake a pretty unhinged portfolio. China had over contracted LNG in the past. They did so because they had drunken their own Kool-Aid and believed the market would grow by a miracle. They learned that gas market growth takes lots of on-the-ground market development and that’s a pain. It takes time too and a lot of infrastructures to be built. Along comes a virus and while this is horrible news in many ways, China seems to use the good effects. It’s a perfect excuse to refuse LNG cargos that they don’t want. That is if sellers are willing to take it on the chin. Memories are long in this business.

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