*

Sinopec, CNOOC set to begin offtake from Venture Global ( VG ),

sources

say

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Weak domestic China demand adds incentive to divert LNG

cargoes

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Latest tariffs come on top of February duties that shifted

LNG

flows

By Chen Aizhu, Emily Chow and Marwa Rashad

SINGAPORE/LONDON, April 8 (Reuters) - Chinese buyers of

LNG are re-selling U.S.-sourced cargoes as tit-for-tat tariffs

drive up import costs, and the trend is set to accelerate as new

multi-year supply deals kick in this month and domestic demand

weakens, traders and analysts say.

Beijing, which imposed 15% tariffs on U.S. LNG imports in

early February, on Friday slapped reciprocal levies on all U.S.

goods beginning April 10, matching U.S. President Donald Trump's

move to put 34% additional tariffs on Chinese goods.

China, the world's largest buyer of liquefied natural gas,

imported no U.S. LNG during March, data from Kpler and LSEG

show. The U.S. accounted for about 5% of China's LNG last year,

according to Chinese customs data.

"Chinese LNG importers will probably shift from thinking:

'We should attempt to re-sell U.S. LNG into Europe' to 'We must

re-sell all U.S. LNG' due to the major difference in tariffs to

be paid," said ICIS analyst Alex Siow.

Already this year, Chinese offtakers of U.S. LNG have resold

into Europe about 70% of what they resold in all of 2024, said

Laura Page, head of Kpler LNG insight.

A big uptick in resales is expected after U.S. exporter

Venture Global's ( VG ) Calcasieu Pass LNG project begins

commercial operations, and as the arbitrage to move cargoes from

one market to another favours Europe over Asia this summer, she

added.

China's state-run Sinopec has contracted to buy

1 million metric tons of LNG annually from Venture Global ( VG )

starting this month, according to two industry sources. Sinopec

has resold its April cargoes, one of them said.

CNOOC, another state firm, is also set to begin

a five-year contract in April for annual supplies of 0.5 million

tons from Venture Global ( VG ), sources added.

CNOOC, Sinopec and Venture Global ( VG ) did not immediately

respond to requests for comment.

Chinese importers Sinochem Group, Foran Energy Group

and state giant PetroChina have been

diverting their U.S.-sourced LNG cargoes, ICIS' Siow said.

Four Chinese traders said buyers of U.S. LNG have been

placing their cargoes in Europe or other Asian markets, as

Beijing's additional tariffs make sales to China unviable.

"Imports stopped after the earlier 15% retaliatory tax

kicked in," said a trader with a state-owned firm, adding that

the new tariffs will make imports even less attractive.

The trader said most of their FOB-based supplies went to

Europe, as those markets were closer to the U.S. and current

prices made the arbitrage more favourable, referring to the

free-on-board contract term that allows buyers to resell

cargoes.

Chinese buyers facing hefty tariffs are also seeing weak

spot demand, as Asian prices , at $13.00/mmBtu on April

4, remain relatively high. Delivered LNG prices to Europe on

Friday were estimated at around $12/mmBtu.

China imported 4.5 million metric tons of LNG in February,

customs data showed, the lowest monthly level since April 2022.

"Any delivery price above the low $10's per million British

thermal units (mmBtu) are considered unsafe - meaning likely

loss-making," said a second Chinese LNG trader.

China's tier-two LNG buyers, mostly city-gas distributors,

were looking to pay $8-9/mmBtu for spot price imports, another

trader said.