Two scenarios: either China follows through on its pledge to gasify everything. Then they will need every whiff o gas they can get and will suck it off from other markets that will in turn sleeve it through to China – for a price. China just made the transition more expensive. OR China does not follow through on its pledge as it cannot afford it anymore – as its own economy starts to reek by the head – in which case there will be oversupply in the market anyhow and it won’t matter if China shuns US LNG or not as everyone will be in for a real hard time. Conclusion: the tariffs don’t really matter for Texas LNG projects.
Donald Trump has long been a double-edged sword for Texas natural gas drillers. As much as he and his administration cheer on the sector by loosening environmental regulations and speeding up permitting times for new LNG facilities, the industry depends on energy and industrial customers in foreign countries buying U.S. natural gas. And with Trump upending decades of global trade norms, commercial relationships are getting trickier by the day.