Goodmorning!
Well... the positive talks between the US & China at the G20 Summit was certainly welcomed news! Wouldn't jump the gun just yet and assume Chinese customers are well and truly back in (Lake Charles) town. If China doesn't step up to the plate, caving in to Donald's demands within 90 days we could be back to square 1 because as you know, I'm cynical about how strong our negotiations are with potential European buyers based on GV's interview with
Reuters back in May being confirmation, " for us, it's strictly been about marketing to China ".
Fast forward to the AGM, it was a must GV having to affirm we're targeting market demand from all over the world, as he realised the hounds would be snapping at his heels. I am heartened though by the developments that emerged from this meeting... Trump agreeing to delay plans to raise tariffs on $200 billion in Chinese goods that would have taken effect Jan 1.
China agreed to buy a " substantial amount " of agriculture , energy and industrial products from the US to reduce the trade deficit. " It's an incredible deal, " Trump told reporters aboard Air Force One, on his way back to Washington. " What I'll be doing is holding back on tariffs. China will be opening up, China will be getting rid of tariffs. China will be buying massive amounts of products from us. "
Remember, 10% tariffs on LNG were never an issue for China purchasing US gas because majority of the buyers are state owned, so the state pays the state and consequently no impact. Their reluctance to buy is purely based on politics. The tariff would be applicable to private companies like JOVO, ENN, Guanghui Energy which means our pool of potential customers certainly widens. One of my favourite quotes by the legendary Warren B,
" someone is sitting in the shade today because someone planted a tree a long time ago! " I liken this to my investment in LNG LTD, having invested years ago realising patience would be required throughout what would be an epic journey. I've still got at least 2/ 3rds of my journey to go till I reach my final destination!
Extract from S&P Global Platts freshly released report,
LNG Limited called the annoucements (at G20) a sign that US LNG projects will " not be detoured in the immediate term " by further trade conflicts. " This provides assurance that projects like Magnolia LNG will be able to execute long-term LNG export contracts with offtakers from China without punitive external factors, " said company CEO Greg Vesey. In June, amid previous trade tensions, Vesey said an interested Chinese buyer was holding off completing a purchase agreement until there was greater certainty.
For the time being, it seems that certainty has gained strength once more!
All the best. JK
