US liquefied natural gas exporters are continuing discussions with potential customers in China despite a lingering trade war with the nation, writes Caroline Evans.

Officials at Sempra Energy and Tellurian told Upstream last week that they continue to speak with Chinese counterparties with the hope of securing a deal once tariffs are lifted.

“We’re not waiting for the trade war to end to move forward with them,” Sempra LNG president Justin Bird told Upstream at Gastech in Houston last week.

“So I think in our future you will see offtake arrangements with China but in the meantime, the trade war is the trade war.”

Beijing imposed a 25% retaliatory levy on US LNG in June after the US hit China with its own tariffs.

The trade disputes appear to have already had an impact on US LNG projects, with LNG Ltd’s Magnolia LNG facility in Louisiana securing a Vietnamese customer after its original plan to go hard in China fizzled amid the tariffs.

Tellurian chief executive Meg Gentle said the Chinese market remains important to the company, which expects demand there to grow from 55 million tonnes per annum currently to 100 million tpa after 2025.

“We have continued our discussions with Chinese companies so that from a business standpoint we are both ready if there is a deal to be done when the two governments agree on a trade solution,” Gentle told Upstream.

Gentle said if the trade friction cannot be resolved by the time Tellurian’s Driftwood LNG facility secures its partners necessary to move forward, the company may try to include Chinese customers in a future project.

While the players expressed some optimism for a resolution, Center for LNG executive director Charlie Riedl worried about the Trump administration’s uncertain approach to foreign policy.

“The administration has demonstrated that their ability to either modify or move the goalposts is very real,” Riedl told Upstream.

“So even if there is a resolution, how stable is that resolution? Or how binding or how lasting could that potentially be?”

Riedl also cautioned that even if a binding resolution is reached, it will still take a long time for US projects to secure Chinese customers. “A return to allowing Chinese buyers to purchase US LNG doesn’t mean the floodgates are going to come swinging open and we’re going to see all of these long-term contracts being signed,” he said.

“It means we will see negotiations resume and then I’m sure there will be reluctance.”