Singapore — A sustained US-China trade war into the next decade may increase average global LNG prices by 2%, with BRG Chair and Managing Director Christopher Goncalves said Thursday. Receive daily email alerts, subscriber notes & personalize your experience. "If US steel tariffs, which affect the cost of new liquefaction facilities, and Chinese retaliatory tariffs on US LNG imports remain in place into the next decade, worldwide average prices will go up 2%," Goncalves said at the CWC LNG Asia Pacific Summit in Singapore. The impact will be particularly felt during the peak winter demand season, he added. If both tariffs remain in place over 2020-25, US LNG exports and China's LNG imports could both decrease significantly, Goncalves said. US exports to Europe might decrease by 7.7 Bcm/year, and exports to Asia by 11.3 Bcm/year, he added. China's LNG imports could be cut by 5 Bcm/year, but compensated partially by additional pipeline imports of about 4.4 Bcm/year from Central Asia and Russia, he said. China has imported nearly 50 bcm of LNG in 2018 to date, according to S&P Global Platts Analytics, while the US has exported more than 20 bcm over the same period. "There is a lot of speculation about who wins and loses, but everybody is impacted and you'll see distortions and cost increases across the board," he said. China last month imposed retaliatory tariffs on an additional $60 billion worth of US imports that included a 10% tariff on LNG, effective September 24. The latest tit-for-tat escalation in the trade war between the two countries came after the US said it would impose a 10% tariff on an additional $200 billion worth of Chinese imports from September 24, and will further lift the duty to 25% from January 1, 2019. -- Abache Abreu, abache.abreu@spglobal.com -- Yi-Jeng Huang, yi.jeng.huang@spglobal.com -- Edited by Wendy Wells, newsdesk@spglobal.com
Liquefied natural gas (LNG) prices could rise 25% if the trade dispute between China and the US continues beyond 2020, according to Christopher Goncalves, Chair and Managing Director of the research firm BRG. The impact of the rise, generated by US steel tariffs hitting building costs for new LNG liquefaction facilities and retaliatory Chinese tariffs on LNG from the US, could have particular impact during winter peak demand. He forecasts US exports and Chinese imports would fall although China may turn to pipeline imports from Central Asia and Russia, while US exports will likely fall to Europe and Asia.