Freeport CEO: DOE advised against LNG exports to China

American companies have been reportedly advised by the United States Department of Energy not to accept Chinese investment into LNG export projects. 

As Freeport LNG chief executive Michael Smith told Reuters, DOE advised the company to carefully select its customers as dealing with Chinese investors could create a political issue.

He said that due to this advice there is a lack of lucrative deals with Chinese companies. He noted that deals that have been previously signed to export U.S. LNG to Chinese companies are worth billions.

However, U.S. produced LNG can still end up on Chinese market through secondary deals..

As Smith said, there is no lack of interest from Chinese companies but Freeport LNG took DOE’s advice and turned down potential customers.

The Department of Energy said, several projects have been granted authorization to export U.S. LNG to foreign markets including China, adding that final destination of the cargo depends on commercial arrangements and is only reported to the DOE upon delivery.

Smith added that, due to competitive interest, Freeport LNG will file for a permit to add a fourth liquefaction train to its terminal where construction on the first three trains is already in progress.

LNG World News Staff; Image: Freeport LNG