First direct US LNG cargo since tariff dispute reaches China, may be re-exported

SINGAPORE: A vessel carrying US liquefied natural gas has sailed directly from the US to China for the first time since trade tensions between Washington and Beijing effectively halted direct shipments, vessel-tracking data showed.

However, analysts say it may never enter China as the terminal's bonded storage facilities allow re-exports without import duties.

Carrying a cargo loaded in early June from ‌U.S. energy firm Venture ⁠Global LNG's ⁠Plaquemines export plant in Louisiana, the Al Fat'h LNG tanker arrived at the PipeChina Yangpu terminal in China's southern island province of Hainan on Wednesday into Thursday, according ​to vessel-tracking data from Kpler and Vortexa.


It is the first direct shipment since the Mu Lan offloaded at Zhangzhou in February 2025, before retaliatory ​tariffs imposed by Beijing and Washington made such imports uneconomic.

At least three LNG vessels have travelled from the U.S. to other countries first before ultimately dropping some small amounts of LNG in China - one in 2025 and two so far in 2026, according to ​data from the U.S. Department of Energy and financial firm LSEG.

FLEXIBILITY FOR CHINESE IMPORTERS

However, ⁠the cargo's ‌arrival does not necessarily mean China will take in the imported LNG, said Vortexa market analyst Florence Yu.

"Yangpu ​port has bonded ​LNG storage tanks as part of Hainan's special customs operations strategy. These are actually China's first LNG ⁠storage tanks approved for bonded operation, allowing LNG to be stored, traded, and re-exported ​without paying Chinese import duties," she said.

"Chinese players have great flexibility under this condition. The ​cargo can be resold later for portfolio optimization or, if domestic supply becomes critical, it can still be imported into China after clearing customs."

The tanker is controlled by QatarEnergy, which bought the cargo on a spot basis from Plaquemines for delivery to China, according to Kpler data.

"We believe it might not enter China's domestic gas market, even though it was technically unloaded in Yangpu. The bonded tank status makes re-export quite likely. Besides, domestic demand remains weak in China, especially in industrial sectors," said Nelson Xiong, analyst at Kpler.

"It ‌makes more economic sense for them to re-export to other countries given high Asian LNG prices and wider profit margins," Xiong said.

Gas was trading at a three-month high near $20 per million British thermal units (mmBtu) at ​the Japan Korea ​Marker (JKM) benchmark in Asia, topping prices of ⁠roughly $18 in Europe and $3 in the U.S..

China, the world's largest LNG importer, has several bonded storage sites for LNG across the country, including at Tianjin and Zhoushan.

It had previously been a major buyer of U.S. LNG, with Chinese companies still holding long-term contracts to ​purchase U.S. supplies. But Chinese importers have been diverting these U.S.-sourced cargoes to buyers elsewhere, as the tariffs have raised import costs. China suspended a 24% additional tariff on U.S. goods for one year, but retained a base tariff of 10% imposed in November. Tariffs on U.S. energy products, including a 15% levy on LNG, also remain in place. The U.S. is the world's largest exporter of LNG, shipping out 109 million metric tons of the fuel last year, according to Kpler data.