Photo credit: UN Photo/Pierre Albouy (CC BY-NC-ND 2.0 https://bit.ly/3yTx0kQ)

China cuts off natural gas supplies to Europe amid energy crisis

The Chinese government has ordered state-owned energy companies to cease selling natural gas to Europe in an effort to stockpile more gas for itself over the winter, according to Bloomberg.

According to a report this week, the Chinese Communist Party’s National Development and Reform Commission has told state energy companies PetroChina, Sinopec, and CNOOC to stop sending shipments of liquefied natural gas (LNG) to Europe and other parts of Asia. Reportedly, the gas is instead to be kept for domestic use.

Last month Gript reported how the EU has reportedly been buying natural gas from China at a premium, which has in turn been buying its gas from Russia.

According to Hong Kong-based news outlet the South China Morning Post, the Chinese government bought 2.35 million tonnes of liquefied natural gas in the first half of 2022 – 28.7% more than the year prior.

This surplus appreciated significantly in value as the cost of energy rose globally later in the year, and China began to sell this gas – much of it from Russia – to energy-strapped Europe at a much higher cost than it was purchased for, raking in handsome profits from the struggling continent.

However, now the State has ordered these shipments to end.

While the Chinese state has not issued a reason for the reported move, some speculate that China may have a small domestic gas deficit and is attempting to stock up ahead of winter.

The move could put even further pressure on the already-struggling continent of Europe coming into the winter months, when demand for energy will be higher and the supply will be greatly reduced thanks to the destruction of the Nord Stream pipelines.

 

 

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