Chinese LNG Buyers Consider Force Majeure: Press

China’s state energy giants are examining whether they can invoke force majeure clauses to temporarily terminate LNG import contracts, following a rapid decline in gas demand caused by coronavirus outbreak, the Financial Times (FT) reported on February 4.

Those considering the move include China National Offshore Oil Corp. (Cnooc), Sinopec and China National Petroleum Corp. (CNPC), sources told the newspaper.

Chinese efforts to contain the coronavirus by shutting down cities and restricting travel have significantly weakened the country’s gas demand, according to the FT. This has depressed prices in the already oversupplied Asian LNG market, with spots falling towards $3/mmbtu for the first time in history, down from $5/mn Bbtu in mid-January.