Chinese LNG importers consider invoking force majeure | Financial Times

Chinese LNG importers consider invoking force majeure | Financial Times:

Chinese state-backed importers of liquefied natural gas are examining if they can provisionally halt contracts for the supercooled fuel, as the coronavirus outbreak depresses energy demand in the world’s second-largest economy.

Two sources briefed on the discussions said the move could see the temporary cancellation of contracts — under a condition known as force majeure — by companies such as China National Offshore Oil Corporation, and possibly Sinopec and China National Petroleum Corporation. Gas demand has fallen rapidly after the extended Chinese new year holiday, as Beijing struggles to bring the coronavirus outbreak under control by shutting down cities and restricting travel.

The companies did not immediately respond to requests for comment outside normal business hours.

“China’s LNG market got off to a very weak start this year,” said an official at Huayou Zhonglan Energy Co, a LNG factory based in the southwestern city of Bazhong. It is not one of those considering force majeure. “Our future depends on how quickly the government puts the disease under control.”