China strikes back by going after America’s energy companies

The United States has an abundance of natural gas that pollution-riddled China badly needs to wean itself off coal.

Eying China’s voracious demand, Cheniere Energy, ExxonMobil (XOM) and other American energy companies are racing to build more than two dozen expensive facilities to export liquefied natural gas, which is super-cooled natural gas that can be transported by ship.

China even marked President Donald Trump’s visit to Beijing last fall by agreeing to invest as much as $43 billion into an LNG project in Alaska.

But this pairing of an able buyer and well-supplied seller no longer looks like a slam dunk. As part of the escalating trade war, China on Tuesday said it will impose a 10% tariff on $60 billion of US products — including LNG.

The trade tensions could make it more difficult for the next wave of LNG export facilities to get the financing needed to get off the ground.

“It’s obviously very concerning. The potential for some projects to get delayed is very real,” said Charlie Riedl, executive director of the Center for Liquefied Natural Gas, a trade group that represents Exxon, Chevron (CVX)and other energy companies.

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