China’s largest LNG importers, CNOOC has suspended contracts amid the rapid spreading of coronavirus, two sources said on Thursday. The sources said that the state-owned energy company, which operates almost half of China’s LNG import terminals, had declared force majeure in imports with at least three suppliers, allowing the company no to meet contractual obligations.
One of the two sources said that the force majeure includes CNOOC’s LNG purchases for February and March. Shell, Total, Qatargas, and Australia’s Woodside Petroleum are among CNOOC’s major LNG suppliers. China’s imports of LNG is almost ground to halt due to the outbreak. LNG traders said that they were scrambling to find alternative outlets for their China-bound shipments, pushing Asia spot prices to record lows.
It remains unclear which unexpected event CNOOC cited in its force majeure declaration. The company has been offering to resell LNG cargoes due to weak demand in China, even before the coronavirus outbreak.