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China-US tariff dispute could be win for Australian LNG

The decision by the Chinese government came in response to US President Donald Trump imposing his own 10 per cent tax on a host of Chinese imports, including LNG, with a plan to move this to 25 per cent by the end of the year.

If the new tariffs go ahead, Australian LNG is likely to become a more viable option for China, which is currently the world’s fastest growing LNG importer.

According to The Australian, planned local LNG projects such as Woodside Petroleum’s Scarborough and Browse projects in Western Australia could benefit from the dispute with the possibility of attaining new and lucrative contracts.

Similarly, plans for expansion of the PNG LNG project, which counts Santos and Oil Search among its joint venture partners, could also be strengthened.

Credit Suisse analyst Saul Kavonic told the publication Australia would be seen as an attractive source of LNG in the fallout from the tariff clash.

“Australia will be more competitive on price compared to US LNG with the tariffs in place, and moreover Australia will be seen as a lower political risk source of LNG supply longer term,” MrKavonic said.

Australia is currently the world second biggest LNG exporter, with China expected to be the world’s biggest importer by the start of the next decade.

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