Operators in the LNG business are assessing the possible impact of the US Defense Department’s blacklisting of China National Offshore Oil Corp., the nation’s largest LNG importer, to its list of alleged “Communist Chinese military companies”, causing CNOOC shares to drop and further raising US-China trade tensions.
CNOOC is the first oil and gas company added to the list, now numbering 35 Chinese firms, from the aerospace, technology, construction and telecoms sector deemed by the Administration of President Donald Trump as having military ties while operating as civilian firms.
CNOOC said it was “shocked and regretful” at being added to the list and added that the move was based on “false and inaccurate information”.
The Hong Kong-listed shares of CNOOC have fallen nearly 14 percent since the announcement and were down almost 4 percent in recent trading to 7.70 Hong Kong dollars ($0.99), valuing the company at 330.4Bln HK dollars ($42.6Bln).
In a filling to the Hong Kong exchange, the state-owned company’s listed unit, CNOOC Ltd, said it was assessing the impact of the situation on the group and would closely monitor developments.
Whatever happens in the future and if the US-China trade war will re-start depends on who is inaugurated in January as the new US President.
This follows a US presidential election in November in which Jo Biden has claimed victory, while the Trump side say they were victims of widespread fraud, enabled by massive postal balloting and outlined in law suits filed in five swing states.
CNOOC currently has capacity and control of nine of China’s network of 20 LNG import terminals and ports.
The company’s LNG import capacity is held at most of the regasification terminals south of Shanghai, the port city where it has capacity at one facility.
It has additionally been a foundation customer with the Australia Queensland Curtis export plant on Curtis Island, near Gladstone.
CNOOC said in its most recent earnings that it was planning to increase storage capacity at its Binhai import terminal under construction in the eastern Jiangsu province, where it would reserve two tanks to help with the imported gas needs for a province in Central China.
CNOOC said it would construct around 1.62 million cubic metres more of storage capacity for LNG at the facility.
The expansion will consist of six tanks, each with storage capacity of 270,000 cubic metres each and construction is expected to be completed in 2023.